Editor's note: This piece was originally posted March 2 on Brookings UpFront as part of The Hutchins Center's "Hutchins Center Explains" series.

What is King v. Burwell?

A court case set to be considered by the Supreme Court over who is eligible to receive the health insurance subsidies contained in the Affordable Care Act (ACA).

What do I need to know about the ACA to understand King v. Burwell?

There are a lot of detailed explanations of the ACA (see Vox and NPR). But what’s important to know for King v. Burwell is that the ACA relies on two major provisions to increase insurance coverage:

An individual mandate requiring most people to get health insurance coverage or else pay a penalty.

A system of subsidies intended to make health insurance coverage affordable, including health exchanges where those without Medicaid or access to affordable employer-sponsored health insurance can purchase subsidized health insurance.

Got it. So what is the King v. Burwell case all about?

The issue in King v. Burwell is whether individuals in states that opted not to build their own exchanges are eligible for health insurance subsidies.

The ACA allows states to set up their own health insurance exchange or participate in the federally run exchange. The plaintiffs (King) argue that, because the legislation refers to those enrolled “through an Exchange established by the State,” individuals in states with federally run exchanges are not eligible for subsidies. However, many analysts argue that the clear intent of the legislation is to allow individuals to obtain subsidized insurance regardless of whether they obtain it through a state exchange or the federal exchange.

Currently, 34 states rely on the federal exchange and could lose subsidies if the Supreme Court rules in favor of King.

What will happen if the court rules in favor of King?

Researchers at the Urban Institute estimate that a Supreme Court ruling in favor of King would reduce federal tax subsidies by $29 billion in 2016, making coverage unaffordable for many and increasing the ranks of the uninsured by 8.2 million people. (Blumberg, Buettgens and Holohan, 2015) Furthermore, because healthy, low-cost individuals would disproportionately leave the marketplace, insurance premiums for those remaining would have to increase by an average of 35 percent (and premiums would now be unsubsidized, resulting in much larger increases in costs for most people.)

It is also likely that many insurance companies would cease participating in the federal exchanges, given the loss of potential customers and the deterioration in the health status of their customer base. It is possible that a “death spiral” would occur: as premiums rise, the healthiest customers leave the marketplace, causing premiums to rise more, causing more healthy people to leave, etc.

Would a ruling in favor of King simply turn the private insurance markets in the affected states back to pre-ACA conditions?

No. The ACA bars insurers from discriminating based on health status. That is, they are required to provide insurance to all customers and can only vary charges based on age, tobacco use, family size, and geography. Before the ACA, insurers could (and did) refuse to cover those with preexisting conditions or charge them a large premium.

The ACA’s combination of the individual mandate and the subsidies increases demand for insurance among those in good health, making it possible for insurance companies to be profitable even without discriminating on the basis of health. However, in the absence of federal subsidies, the new insurance regulations (which would not be affected by a ruling in favor of King) would leave the private insurance market in much worse shape than before the ACA. (See the description of the death spiral, above.)

How would a decision for King affect people who get health insurance through their employers?

It would have little to no effect on employer-provided health insurance.

Would a ruling in favor of King be directly beneficial for any states?

No. In contrast to the ACA’s Medicaid expansion—where states will eventually be responsible for 10% of the cost and some states worry their share could be increased in the future—exchange subsidies are fully funded by the federal government. The subsidies result in more money flowing into the states, while placing no direct strain on state budgets.

A ruling in favor of King would be a big step in the direction of getting rid of Obamacare, right?

Yes. Removing the exchange subsidies from 2/3 of the states could have a significant impact on the ACA’s success. However, it is likely that if the Supreme Court Rules in favor of King, some states currently operating within the federal exchange would tweak their systems to be classified as a state-run exchange in order to keep their subsidies. States who do lose subsidies may find the loss of funds too painful and decide to set up their own exchange in order to regain their subsidies. Therefore, a ruling in favor of King is not necessarily a death blow to Obamacare.

What might Congress do if the Court rules for King?

This isn’t clear. The Republican leadership may move quickly to repeal other pieces (or all) of the ACA, hoping to use the decision as momentum, or may take a wait-and-see approach, hoping that a ruling for King would be so damaging that it would build support for a full repeal down the road.

Is there some point at which it will be too late to repeal the ACA?

That’s tough to say. But, absent a ruling in favor of King, the Obama Administration is hoping that by next year, so many people will have gained health care coverage through the ACA that the debate will shift from repealing the ACA to tweaking it instead.

Authors

Editor's note: This piece was originally posted March 2 on Brookings UpFront as part of The Hutchins Center's "Hutchins Center Explains" series.

What is King v. Burwell?

A court case set to be considered by the Supreme Court over who is eligible to receive the health insurance subsidies contained in the Affordable Care Act (ACA).

What do I need to know about the ACA to understand King v. Burwell?

There are a lot of detailed explanations of the ACA (see Vox and NPR). But what’s important to know for King v. Burwell is that the ACA relies on two major provisions to increase insurance coverage:

An individual mandate requiring most people to get health insurance coverage or else pay a penalty.

A system of subsidies intended to make health insurance coverage affordable, including health exchanges where those without Medicaid or access to affordable employer-sponsored health insurance can purchase subsidized health insurance.

Got it. So what is the King v. Burwell case all about?

The issue in King v. Burwell is whether individuals in states that opted not to build their own exchanges are eligible for health insurance subsidies.

The ACA allows states to set up their own health insurance exchange or participate in the federally run exchange. The plaintiffs (King) argue that, because the legislation refers to those enrolled “through an Exchange established by the State,” individuals in states with federally run exchanges are not eligible for subsidies. However, many analysts argue that the clear intent of the legislation is to allow individuals to obtain subsidized insurance regardless of whether they obtain it through a state exchange or the federal exchange.

Currently, 34 states rely on the federal exchange and could lose subsidies if the Supreme Court rules in favor of King.

What will happen if the court rules in favor of King?

Researchers at the Urban Institute estimate that a Supreme Court ruling in favor of King would reduce federal tax subsidies by $29 billion in 2016, making coverage unaffordable for many and increasing the ranks of the uninsured by 8.2 million people. (Blumberg, Buettgens and Holohan, 2015) Furthermore, because healthy, low-cost individuals would disproportionately leave the marketplace, insurance premiums for those remaining would have to increase by an average of 35 percent (and premiums would now be unsubsidized, resulting in much larger increases in costs for most people.)

It is also likely that many insurance companies would cease participating in the federal exchanges, given the loss of potential customers and the deterioration in the health status of their customer base. It is possible that a “death spiral” would occur: as premiums rise, the healthiest customers leave the marketplace, causing premiums to rise more, causing more healthy people to leave, etc.

Would a ruling in favor of King simply turn the private insurance markets in the affected states back to pre-ACA conditions?

No. The ACA bars insurers from discriminating based on health status. That is, they are required to provide insurance to all customers and can only vary charges based on age, tobacco use, family size, and geography. Before the ACA, insurers could (and did) refuse to cover those with preexisting conditions or charge them a large premium.

The ACA’s combination of the individual mandate and the subsidies increases demand for insurance among those in good health, making it possible for insurance companies to be profitable even without discriminating on the basis of health. However, in the absence of federal subsidies, the new insurance regulations (which would not be affected by a ruling in favor of King) would leave the private insurance market in much worse shape than before the ACA. (See the description of the death spiral, above.)

How would a decision for King affect people who get health insurance through their employers?

It would have little to no effect on employer-provided health insurance.

Would a ruling in favor of King be directly beneficial for any states?

No. In contrast to the ACA’s Medicaid expansion—where states will eventually be responsible for 10% of the cost and some states worry their share could be increased in the future—exchange subsidies are fully funded by the federal government. The subsidies result in more money flowing into the states, while placing no direct strain on state budgets.

A ruling in favor of King would be a big step in the direction of getting rid of Obamacare, right?

Yes. Removing the exchange subsidies from 2/3 of the states could have a significant impact on the ACA’s success. However, it is likely that if the Supreme Court Rules in favor of King, some states currently operating within the federal exchange would tweak their systems to be classified as a state-run exchange in order to keep their subsidies. States who do lose subsidies may find the loss of funds too painful and decide to set up their own exchange in order to regain their subsidies. Therefore, a ruling in favor of King is not necessarily a death blow to Obamacare.

What might Congress do if the Court rules for King?

This isn’t clear. The Republican leadership may move quickly to repeal other pieces (or all) of the ACA, hoping to use the decision as momentum, or may take a wait-and-see approach, hoping that a ruling for King would be so damaging that it would build support for a full repeal down the road.

Is there some point at which it will be too late to repeal the ACA?

That’s tough to say. But, absent a ruling in favor of King, the Obama Administration is hoping that by next year, so many people will have gained health care coverage through the ACA that the debate will shift from repealing the ACA to tweaking it instead.

With all the bad news about the increased prevalence of autism spectrum disorders in the United States today, there is nonetheless some good news. Therapy is improving. The behavioral school, pioneered by luminaries like Ivor Lovaas and boosted by the writings of proponents like Catherine Maurice in the 1980s and 1990s, has generated very good curricula for teaching children with this set of cognitive issues. A national Applied Behavioral Analysis Board teaches and certifies therapists. Meanwhile, the so-called Floortime method, pioneered by Stanley Greenspan, as well as other methods such as Relationship Development Intervention, have challenged the prevailing ABA methodology and led to improved teaching approaches. Many public schools, including those in my home county of Montgomery County, Maryland, have made great strides in incorporating the resulting insights into their teaching.

Cures for autism remain elusive, as does any simple explanation for its causes or greater incidence today. And therapy methods do not generally promise full recovery, even when started early and pursued rigorously. But many children on the autism spectrum can aspire to fulfilling lives with real friendships and jobs. Even those for whom such goals are too high a bar are doing better than ever before.

However, the costs associated with this therapy are staggering. Unless a parent simply devotes his or her life to the undertaking personally, and gives up any aspirations of a full-time career, the recommended regimens generally require 20 to 40 hours per week of paid, specialized work with a dedicated professional. Most specialists in the field are hardly getting rich; hourly rates for therapy are typically in the range of $20 to $60 an hour. Yet because the therapy is generally one-on-one, the costs pile up. Weekly bills often reach $1,000. They can easily reach $2,000 in expensive metropolitan areas, without any gold-plating or extravagance.

This is unacceptable as a practical matter. Because there is no cure for autism, or guaranteed path to quick recovery, and because early intervention is widely recognized as essential to maximize the prospects for progress, therapy in any given child's life can easily last ten years or more. As children get older, more of the costs are often borne by school districts. But it remains true that the parents of a child on the spectrum can expect to pay several hundred thousand dollars over the course of the child's upbringing for intensive therapy of the type now considered necessary.

And here's the real kicker: even in 2015, most of these costs are still not covered by health insurance. There has been some progress, to be sure. Thanks to the work of Autism Speaks, an advocacy organization, and other key groups, most states now require that insurance plans provide a certain minimal amount of coverage for a certain period of time. Typically, the pre-school years are covered, at least in part. The average parent in the average state might realistically hope to have around $100,000 in total therapy costs paid by insurance over the course of a single child's upbringing. Obamacare has not measurably helped the situation at the federal level; in fact, it may have made things modestly worse, by reducing tax deductions for medical costs like autism therapy. This was not done out of deliberate cruelty, but was seen as a way to generate revenue to help subsidize the basic medical costs of lower-income Americans as required under the Affordable Care Act.

Covering say $100,000 in autism therapy costs is far better than nothing. But it is far less than what is needed. Ideally, insurance plans will become more generous in the years ahead. However, I also have a recommendation, from the perspective not of a trained expert or therapist, but from a parent who has watched typical autism therapy for my own child for more than a decade and read several dozen books on the state of the field. It is a provocation more than a carefully developed and rigorously researched proposal--but I think there is something to it.

Over time, I would argue that standard autism therapy needs to move away from one-on-one work between a trained professional and a single child, at least in many settings and cases. Given the number of hours required for these kids to make progress, small-group teaching must become the norm whenever possible. Ideally, one therapist for 3 to 4 kids would make the entire endeavor fundamentally affordable, if still expensive (subsidies could help those with lesser means, even more than is the case today). But even moving to a 1:2 ratio between teacher and student would help greatly.

There are, to be sure, challenges associated with this idea. Matching up kids at comparable skill levels with comparable cognitive abilities would be a massive undertaking. Logistically, getting the kids to the same place could also be hard. And parents will sometimes worry about confidentiality issues; they might not want their child's abilities and disabilities widely advertised to a broad community in the effort to match children of similar capacities so that they can both benefit from a single teacher or therapist. For certain stages in the typical autism therapy progression, moreover, it may simply not be realistic to work with more than one child at a time. And for children living in remote areas, or new to a community, or facing other challenges, this idea simply may not fly.

But in many other cases, perhaps in most cases, the idea makes eminent sense. Remember also that a core deficit of most children with autism is the whole suite of social and conversational skills. Matching kids up with peers can often be therapeutically beneficial for that reason. Indeed, some innovative therapy providers, such as Autism Outreach in Herndon, Virginia, already attempt to create this very dynamic in much of the therapy they provide. But in general in the United States today, one-on-one therapy remains the norm.

Here's one more specific reason to think that now is the time to change this-- the dot.com revolution. There could be whole new ways to figure out how to match kids within a certain geographic location that can protect confidentiality, and also let parents do the work themselves, rather than expecting therapists to pair up kids for them. It should be straightforward to develop an app that would allow parents to code their child's skills and aptitudes and then allow the software to search for children of similar abilities in a neighboring area. Parents could then talk by phone or email or in person and make sure that the pairing would be suitable, before actually embarking on the teaming arrangement. They could also reassess the wisdom of the pairing as time went on.

Perhaps an organization like Autism Speaks could fund the development of such a technology and then attempt to pilot it in one part of the country as a proof of concept.

We have made so much progress in the autism world. But there is so far still to go. And the affordability issue remains one of the central challenges to overcome. It is time we got after this issue; the one-on-one therapy model needs to be rethought and revised.

Authors

With all the bad news about the increased prevalence of autism spectrum disorders in the United States today, there is nonetheless some good news. Therapy is improving. The behavioral school, pioneered by luminaries like Ivor Lovaas and boosted by the writings of proponents like Catherine Maurice in the 1980s and 1990s, has generated very good curricula for teaching children with this set of cognitive issues. A national Applied Behavioral Analysis Board teaches and certifies therapists. Meanwhile, the so-called Floortime method, pioneered by Stanley Greenspan, as well as other methods such as Relationship Development Intervention, have challenged the prevailing ABA methodology and led to improved teaching approaches. Many public schools, including those in my home county of Montgomery County, Maryland, have made great strides in incorporating the resulting insights into their teaching.

Cures for autism remain elusive, as does any simple explanation for its causes or greater incidence today. And therapy methods do not generally promise full recovery, even when started early and pursued rigorously. But many children on the autism spectrum can aspire to fulfilling lives with real friendships and jobs. Even those for whom such goals are too high a bar are doing better than ever before.

However, the costs associated with this therapy are staggering. Unless a parent simply devotes his or her life to the undertaking personally, and gives up any aspirations of a full-time career, the recommended regimens generally require 20 to 40 hours per week of paid, specialized work with a dedicated professional. Most specialists in the field are hardly getting rich; hourly rates for therapy are typically in the range of $20 to $60 an hour. Yet because the therapy is generally one-on-one, the costs pile up. Weekly bills often reach $1,000. They can easily reach $2,000 in expensive metropolitan areas, without any gold-plating or extravagance.

This is unacceptable as a practical matter. Because there is no cure for autism, or guaranteed path to quick recovery, and because early intervention is widely recognized as essential to maximize the prospects for progress, therapy in any given child's life can easily last ten years or more. As children get older, more of the costs are often borne by school districts. But it remains true that the parents of a child on the spectrum can expect to pay several hundred thousand dollars over the course of the child's upbringing for intensive therapy of the type now considered necessary.

And here's the real kicker: even in 2015, most of these costs are still not covered by health insurance. There has been some progress, to be sure. Thanks to the work of Autism Speaks, an advocacy organization, and other key groups, most states now require that insurance plans provide a certain minimal amount of coverage for a certain period of time. Typically, the pre-school years are covered, at least in part. The average parent in the average state might realistically hope to have around $100,000 in total therapy costs paid by insurance over the course of a single child's upbringing. Obamacare has not measurably helped the situation at the federal level; in fact, it may have made things modestly worse, by reducing tax deductions for medical costs like autism therapy. This was not done out of deliberate cruelty, but was seen as a way to generate revenue to help subsidize the basic medical costs of lower-income Americans as required under the Affordable Care Act.

Covering say $100,000 in autism therapy costs is far better than nothing. But it is far less than what is needed. Ideally, insurance plans will become more generous in the years ahead. However, I also have a recommendation, from the perspective not of a trained expert or therapist, but from a parent who has watched typical autism therapy for my own child for more than a decade and read several dozen books on the state of the field. It is a provocation more than a carefully developed and rigorously researched proposal--but I think there is something to it.

Over time, I would argue that standard autism therapy needs to move away from one-on-one work between a trained professional and a single child, at least in many settings and cases. Given the number of hours required for these kids to make progress, small-group teaching must become the norm whenever possible. Ideally, one therapist for 3 to 4 kids would make the entire endeavor fundamentally affordable, if still expensive (subsidies could help those with lesser means, even more than is the case today). But even moving to a 1:2 ratio between teacher and student would help greatly.

There are, to be sure, challenges associated with this idea. Matching up kids at comparable skill levels with comparable cognitive abilities would be a massive undertaking. Logistically, getting the kids to the same place could also be hard. And parents will sometimes worry about confidentiality issues; they might not want their child's abilities and disabilities widely advertised to a broad community in the effort to match children of similar capacities so that they can both benefit from a single teacher or therapist. For certain stages in the typical autism therapy progression, moreover, it may simply not be realistic to work with more than one child at a time. And for children living in remote areas, or new to a community, or facing other challenges, this idea simply may not fly.

But in many other cases, perhaps in most cases, the idea makes eminent sense. Remember also that a core deficit of most children with autism is the whole suite of social and conversational skills. Matching kids up with peers can often be therapeutically beneficial for that reason. Indeed, some innovative therapy providers, such as Autism Outreach in Herndon, Virginia, already attempt to create this very dynamic in much of the therapy they provide. But in general in the United States today, one-on-one therapy remains the norm.

Here's one more specific reason to think that now is the time to change this-- the dot.com revolution. There could be whole new ways to figure out how to match kids within a certain geographic location that can protect confidentiality, and also let parents do the work themselves, rather than expecting therapists to pair up kids for them. It should be straightforward to develop an app that would allow parents to code their child's skills and aptitudes and then allow the software to search for children of similar abilities in a neighboring area. Parents could then talk by phone or email or in person and make sure that the pairing would be suitable, before actually embarking on the teaming arrangement. They could also reassess the wisdom of the pairing as time went on.

Perhaps an organization like Autism Speaks could fund the development of such a technology and then attempt to pilot it in one part of the country as a proof of concept.

We have made so much progress in the autism world. But there is so far still to go. And the affordability issue remains one of the central challenges to overcome. It is time we got after this issue; the one-on-one therapy model needs to be rethought and revised.

Authors

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http://www.brookings.edu/blogs/health360/posts/2015/03/03-more-meaningful-health-it-mcclellan?rssid=health{7A19D2B2-BDB9-45BB-9852-B7689C9907C0}http://webfeeds.brookings.edu/~/86331358/0/brookingsrss/topics/health~Making-health-IT-more-meaningful-in-a-valuebased-care-environmentMaking health IT more 'meaningful' in a value-based care environment

Health information technology (IT) holds the potential to enable higher-quality, lower-cost health care and has been a major focus of federal health care policy. Formed by executive action in 2004, the Office of the National Coordinator for Health IT soon received Congressional support with the goal of achieving widespread use of health IT within a decade. As part of the 2009 American Recovery and Reinvestment Act, Congress enacted the Meaningful Use (MU) program to provide financial incentives to accelerate EHR uptake and other health IT tools, including more timely access for patients to their personal health information.

To date, the MU program been successful in leading to substantial adoption of EHRs by health care providers across the United States, with approximately half of US providers now using an EHR that is MU certified. MU has also been credited as being largely responsible for the rapid adoption of e-prescribing and the increased use of health information exchanges. However, the promise of health IT has not yet been fulfilled. MU has been criticized by providers for its reliance on a single set of specific mandatory functions and workflows that define data collection and EHR capabilities. Providers have also complained of excessive prices associated with clinical interoperability. Furthermore, EHR usability and usefulness has worsened since MU began to drive EHR functionality and design via the parallel MU EHR certification program.

Most of the current health IT conversation has been directed at the cost of information exchange. However, while this important barrier needs resolution, we are concerned other structural problems may prevent health IT tools and strategies from being used effectively to support high value care. Here, we summarize a few key challenges that many providers and health care professionals continue to face as they work to succeed in an increasingly value-based care environment.

Addressing key challenges

Uniformity of requirements: The MU and the EHR certification programs have largely relied on a specific set of requirements and process measures for all providers, regardless of specialty or scope of practice. In some areas, such as e-prescribing capabilities, MU has helped to give providers more certainty around health IT adoption decisions, since applications in certified EHRs must contain a specific, clear set of minimum functionalities.

However, this uniform approach is not always a good fit for the diverse realities of clinical care, which are likely to benefit from quite different health IT functionalities and tools based on specialty and scope of practice. For instance, a provider caring for patients with chronic diseases may require detailed and longitudinal information, while a cosmetic surgeon does not. With uniform standards, the “informationalist” clinician may feel that the EHR is underpowered for their patient management needs, whereas the “proceduralist” might feel that the EHR is too cluttered and is not designed to fit their needs.

Specific, process-driven measures: Prior to the MU program, many EHRs were developed mainly for documentation and coding. Others, particularly those used in select academic medical centers, were extremely sophisticated and built to optimize workflow and quality objectives within the center. Given this varied EHR environment, the prescriptive approach of the early stages of MU was paramount in creating a core set of valuable functionalities and thus helped increase provider adoption.

However, as MU certification requirements increased many AMCs had to abandon their usable “home grown” EHRs in favor of commercial EHRs that were MU certified. Some of these AMCs and other providers have complained about their ability to effectively use these new MU-certified products. In general, software usability improves with efforts towards “user-centered design”, a software design principle that places end-user perceptions and needs at the forefront. In contrast, many believe that the MU certification program is a root cause of limited usability since it focuses on MU-required designs rather than on provider-driven workflows. While “Stage 3” of the MU program aims to focus on outcomes, the earliest that Stage 3 will start is 2017, and the pathway for shifting from health IT process measures to relevant outcome measures is not yet clear.

Failure to prioritize access to accurate, actionable information related to coverage and payment: The current set of specific, prescriptive provider and hospital workflows as defined by MU has not enabled broad access to timely, accurate, and actionable information on coverage and payment. This can be attributed to a lack of key information inside or integrated with the EHR that reflects patient cost and health insurance coverage. Without this information, patients and providers must go beyond their EHR systems to get the information they need to make informed decisions about the testing and treatment. As a result, many testing and treatment decisions may be unnecessarily costly, or delayed or denied, thus leading to frustrations and missed opportunities for patients and providers to achieve better care.

Gaps in practical and effective interoperability: Even where information is captured in the EHR and exportable using existing interoperability standards, health plans, insurance companies, and employers often do not accept information in these standard formats, and additionally require duplicative documentation. For instance, the current proposed operating rules for prior authorization of referrals and treatments do not consider electronic transmissions of content or attachments – items that are integral for most prior authorizations. And worse, the current vision for this administrative interoperability is not based on leveraging what is possible today with MU-certified EHRs or more state-of-the-art pathways for clinical interoperability such as FHIR (Fast Healthcare Interoperability Resources), but rather by requiring unique and duplicative documentation into a separate administrative system. Instead of focusing on incentives for exporting data, an alternative approach may be to support real business cases for practical interoperability – including more emphasis on relevant payment-related information. Such a refocusing on business cases could improve usefulness and interoperability without the need for such complex process measures and detailed standard design requirements.

Key questions: What should be next for federal health IT policy?

In our upcoming event, we will address the challenges for achieving more effective use of health IT and interoperability to improve care, particularly in light of trends toward more value-focused health care payments and other challenges facing health care providers. Key questions include:

What are the greatest unfulfilled opportunities for health IT tools and strategies to support better care, lower costs, and less administrative burden?

What changes in payments, including both new payment models and changes in Meaningful Use incentives, have the most potential to support more effective use of health IT to improve care and lower costs?

Authors

Health information technology (IT) holds the potential to enable higher-quality, lower-cost health care and has been a major focus of federal health care policy. Formed by executive action in 2004, the Office of the National Coordinator for Health IT soon received Congressional support with the goal of achieving widespread use of health IT within a decade. As part of the 2009 American Recovery and Reinvestment Act, Congress enacted the Meaningful Use (MU) program to provide financial incentives to accelerate EHR uptake and other health IT tools, including more timely access for patients to their personal health information.

To date, the MU program been successful in leading to substantial adoption of EHRs by health care providers across the United States, with approximately half of US providers now using an EHR that is MU certified. MU has also been credited as being largely responsible for the rapid adoption of e-prescribing and the increased use of health information exchanges. However, the promise of health IT has not yet been fulfilled. MU has been criticized by providers for its reliance on a single set of specific mandatory functions and workflows that define data collection and EHR capabilities. Providers have also complained of excessive prices associated with clinical interoperability. Furthermore, EHR usability and usefulness has worsened since MU began to drive EHR functionality and design via the parallel MU EHR certification program.

Most of the current health IT conversation has been directed at the cost of information exchange. However, while this important barrier needs resolution, we are concerned other structural problems may prevent health IT tools and strategies from being used effectively to support high value care. Here, we summarize a few key challenges that many providers and health care professionals continue to face as they work to succeed in an increasingly value-based care environment.

Addressing key challenges

Uniformity of requirements: The MU and the EHR certification programs have largely relied on a specific set of requirements and process measures for all providers, regardless of specialty or scope of practice. In some areas, such as e-prescribing capabilities, MU has helped to give providers more certainty around health IT adoption decisions, since applications in certified EHRs must contain a specific, clear set of minimum functionalities.

However, this uniform approach is not always a good fit for the diverse realities of clinical care, which are likely to benefit from quite different health IT functionalities and tools based on specialty and scope of practice. For instance, a provider caring for patients with chronic diseases may require detailed and longitudinal information, while a cosmetic surgeon does not. With uniform standards, the “informationalist” clinician may feel that the EHR is underpowered for their patient management needs, whereas the “proceduralist” might feel that the EHR is too cluttered and is not designed to fit their needs.

Specific, process-driven measures: Prior to the MU program, many EHRs were developed mainly for documentation and coding. Others, particularly those used in select academic medical centers, were extremely sophisticated and built to optimize workflow and quality objectives within the center. Given this varied EHR environment, the prescriptive approach of the early stages of MU was paramount in creating a core set of valuable functionalities and thus helped increase provider adoption.

However, as MU certification requirements increased many AMCs had to abandon their usable “home grown” EHRs in favor of commercial EHRs that were MU certified. Some of these AMCs and other providers have complained about their ability to effectively use these new MU-certified products. In general, software usability improves with efforts towards “user-centered design”, a software design principle that places end-user perceptions and needs at the forefront. In contrast, many believe that the MU certification program is a root cause of limited usability since it focuses on MU-required designs rather than on provider-driven workflows. While “Stage 3” of the MU program aims to focus on outcomes, the earliest that Stage 3 will start is 2017, and the pathway for shifting from health IT process measures to relevant outcome measures is not yet clear.

Failure to prioritize access to accurate, actionable information related to coverage and payment: The current set of specific, prescriptive provider and hospital workflows as defined by MU has not enabled broad access to timely, accurate, and actionable information on coverage and payment. This can be attributed to a lack of key information inside or integrated with the EHR that reflects patient cost and health insurance coverage. Without this information, patients and providers must go beyond their EHR systems to get the information they need to make informed decisions about the testing and treatment. As a result, many testing and treatment decisions may be unnecessarily costly, or delayed or denied, thus leading to frustrations and missed opportunities for patients and providers to achieve better care.

Gaps in practical and effective interoperability: Even where information is captured in the EHR and exportable using existing interoperability standards, health plans, insurance companies, and employers often do not accept information in these standard formats, and additionally require duplicative documentation. For instance, the current proposed operating rules for prior authorization of referrals and treatments do not consider electronic transmissions of content or attachments – items that are integral for most prior authorizations. And worse, the current vision for this administrative interoperability is not based on leveraging what is possible today with MU-certified EHRs or more state-of-the-art pathways for clinical interoperability such as FHIR (Fast Healthcare Interoperability Resources), but rather by requiring unique and duplicative documentation into a separate administrative system. Instead of focusing on incentives for exporting data, an alternative approach may be to support real business cases for practical interoperability – including more emphasis on relevant payment-related information. Such a refocusing on business cases could improve usefulness and interoperability without the need for such complex process measures and detailed standard design requirements.

Key questions: What should be next for federal health IT policy?

In our upcoming event, we will address the challenges for achieving more effective use of health IT and interoperability to improve care, particularly in light of trends toward more value-focused health care payments and other challenges facing health care providers. Key questions include:

What are the greatest unfulfilled opportunities for health IT tools and strategies to support better care, lower costs, and less administrative burden?

What changes in payments, including both new payment models and changes in Meaningful Use incentives, have the most potential to support more effective use of health IT to improve care and lower costs?

What is King v. Burwell?
A court case set to be considered by the Supreme Court over who is eligible to receive the health insurance subsidies contained in the Affordable Care Act (ACA).

What do I need to know about the ACA to understand King v. Burwell?

There are a lot of detailed explanations of the ACA (see Vox and NPR). But what’s important to know for King v. Burwell is that the ACA relies on two major provisions to increase insurance coverage:

An individual mandate requiring most people to get health insurance coverage or else pay a penalty.

A system of subsidies intended to make health insurance coverage affordable, including health exchanges where those without Medicaid or access to affordable employer-sponsored health insurance can purchase subsidized health insurance.

Got it. So what is the King v. Burwell case all about?

The issue in King v. Burwell is whether individuals in states that opted not to build their own exchanges are eligible for health insurance subsidies.

The ACA allows states to set up their own health insurance exchange or participate in the federally run exchange. The plaintiffs (King) argue that, because the legislation refers to those enrolled “through an Exchange established by the State,” individuals in states with federally run exchanges are not eligible for subsidies. However, many analysts argue that the clear intent of the legislation is to allow individuals to obtain subsidized insurance regardless of whether they obtain it through a state exchange or the federal exchange.

Currently, 34 states rely on the federal exchange and could lose subsidies if the Supreme Court rules in favor of King.

What will happen if the court rules in favor of King?

Researchers at the Urban Institute estimate that a Supreme Court ruling in favor of King would reduce federal tax subsidies by $29 billion in 2016, making coverage unaffordable for many and increasing the ranks of the uninsured by 8.2 million people. (Blumberg, Buettgens and Holohan, 2015) Furthermore, because healthy, low-cost individuals would disproportionately leave the marketplace, insurance premiums for those remaining would have to increase by an average of 35 percent (and premiums would now be unsubsidized, resulting in much larger increases in costs for most people.)

It is also likely that many insurance companies would cease participating in the federal exchanges, given the loss of potential customers and the deterioration in the health status of their customer base. It is possible that a “death spiral” would occur: as premiums rise, the healthiest customers leave the marketplace, causing premiums to rise more, causing more healthy people to leave, etc.

Would a ruling in favor of King simply turn the private insurance markets in the affected states back to pre-ACA conditions?

No. The ACA bars insurers from discriminating based on health status. That is, they are required to provide insurance to all customers and can only vary charges based on age, tobacco use, family size, and geography. Before the ACA, insurers could (and did) refuse to cover those with preexisting conditions or charge them a large premium.

The ACA’s combination of the individual mandate and the subsidies increases demand for insurance among those in good health, making it possible for insurance companies to be profitable even without discriminating on the basis of health. However, in the absence of federal subsidies, the new insurance regulations (which would not be affected by a ruling in favor of King) would leave the private insurance market in much worse shape than before the ACA. (See the description of the death spiral, above.)

How would a decision for King affect people who get health insurance through their employers?

It would have little to no effect on employer-provided health insurance.

Would a ruling in favor of King be directly beneficial for any states?

No. In contrast to the ACA’s Medicaid expansion—where states will eventually be responsible for 10% of the cost and some states worry their share could be increased in the future—exchange subsidies are fully funded by the federal government. The subsidies result in more money flowing into the states, while placing no direct strain on state budgets.

A ruling in favor of King would be a big step in the direction of getting rid of Obamacare, right?

Yes. Removing the exchange subsidies from 2/3 of the states could have a significant impact on the ACA’s success. However, it is likely that if the Supreme Court Rules in favor of King, some states currently operating within the federal exchange would tweak their systems to be classified as a state-run exchange in order to keep their subsidies. States who do lose subsidies may find the loss of funds too painful and decide to set up their own exchange in order to regain their subsidies. Therefore, a ruling in favor of King is not necessarily a death blow to Obamacare.

What might Congress do if the Court rules for King?

This isn’t clear. The Republican leadership may move quickly to repeal other pieces (or all) of the ACA, hoping to use the decision as momentum, or may take a wait-and-see approach, hoping that a ruling for King would be so damaging that it would build support for a full repeal down the road.

Is there some point at which it will be too late to repeal the ACA?

That’s tough to say. But, absent a ruling in favor of King, the Obama Administration is hoping that by next year, so many people will have gained health care coverage through the ACA that the debate will shift from repealing the ACA to tweaking it instead.

Authors

What is King v. Burwell?
A court case set to be considered by the Supreme Court over who is eligible to receive the health insurance subsidies contained in the Affordable Care Act (ACA).

What do I need to know about the ACA to understand King v. Burwell?

There are a lot of detailed explanations of the ACA (see Vox and NPR). But what’s important to know for King v. Burwell is that the ACA relies on two major provisions to increase insurance coverage:

An individual mandate requiring most people to get health insurance coverage or else pay a penalty.

A system of subsidies intended to make health insurance coverage affordable, including health exchanges where those without Medicaid or access to affordable employer-sponsored health insurance can purchase subsidized health insurance.

Got it. So what is the King v. Burwell case all about?

The issue in King v. Burwell is whether individuals in states that opted not to build their own exchanges are eligible for health insurance subsidies.

The ACA allows states to set up their own health insurance exchange or participate in the federally run exchange. The plaintiffs (King) argue that, because the legislation refers to those enrolled “through an Exchange established by the State,” individuals in states with federally run exchanges are not eligible for subsidies. However, many analysts argue that the clear intent of the legislation is to allow individuals to obtain subsidized insurance regardless of whether they obtain it through a state exchange or the federal exchange.

Currently, 34 states rely on the federal exchange and could lose subsidies if the Supreme Court rules in favor of King.

What will happen if the court rules in favor of King?

Researchers at the Urban Institute estimate that a Supreme Court ruling in favor of King would reduce federal tax subsidies by $29 billion in 2016, making coverage unaffordable for many and increasing the ranks of the uninsured by 8.2 million people. (Blumberg, Buettgens and Holohan, 2015) Furthermore, because healthy, low-cost individuals would disproportionately leave the marketplace, insurance premiums for those remaining would have to increase by an average of 35 percent (and premiums would now be unsubsidized, resulting in much larger increases in costs for most people.)

It is also likely that many insurance companies would cease participating in the federal exchanges, given the loss of potential customers and the deterioration in the health status of their customer base. It is possible that a “death spiral” would occur: as premiums rise, the healthiest customers leave the marketplace, causing premiums to rise more, causing more healthy people to leave, etc.

Would a ruling in favor of King simply turn the private insurance markets in the affected states back to pre-ACA conditions?

No. The ACA bars insurers from discriminating based on health status. That is, they are required to provide insurance to all customers and can only vary charges based on age, tobacco use, family size, and geography. Before the ACA, insurers could (and did) refuse to cover those with preexisting conditions or charge them a large premium.

The ACA’s combination of the individual mandate and the subsidies increases demand for insurance among those in good health, making it possible for insurance companies to be profitable even without discriminating on the basis of health. However, in the absence of federal subsidies, the new insurance regulations (which would not be affected by a ruling in favor of King) would leave the private insurance market in much worse shape than before the ACA. (See the description of the death spiral, above.)

How would a decision for King affect people who get health insurance through their employers?

It would have little to no effect on employer-provided health insurance.

Would a ruling in favor of King be directly beneficial for any states?

No. In contrast to the ACA’s Medicaid expansion—where states will eventually be responsible for 10% of the cost and some states worry their share could be increased in the future—exchange subsidies are fully funded by the federal government. The subsidies result in more money flowing into the states, while placing no direct strain on state budgets.

A ruling in favor of King would be a big step in the direction of getting rid of Obamacare, right?

Yes. Removing the exchange subsidies from 2/3 of the states could have a significant impact on the ACA’s success. However, it is likely that if the Supreme Court Rules in favor of King, some states currently operating within the federal exchange would tweak their systems to be classified as a state-run exchange in order to keep their subsidies. States who do lose subsidies may find the loss of funds too painful and decide to set up their own exchange in order to regain their subsidies. Therefore, a ruling in favor of King is not necessarily a death blow to Obamacare.

What might Congress do if the Court rules for King?

This isn’t clear. The Republican leadership may move quickly to repeal other pieces (or all) of the ACA, hoping to use the decision as momentum, or may take a wait-and-see approach, hoping that a ruling for King would be so damaging that it would build support for a full repeal down the road.

Is there some point at which it will be too late to repeal the ACA?

That’s tough to say. But, absent a ruling in favor of King, the Obama Administration is hoping that by next year, so many people will have gained health care coverage through the ACA that the debate will shift from repealing the ACA to tweaking it instead.

Authors

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http://www.brookings.edu/blogs/health360/posts/2015/02/27-antibiotic-development-in-an-age-of-resistance?rssid=health{A3E1D952-DB5C-4849-8D20-6159951E7C15}http://webfeeds.brookings.edu/~/86094079/0/brookingsrss/topics/health~Advancing-antibiotic-development-in-the-age-of-superbugsAdvancing antibiotic development in the age of 'superbugs'

While antibiotics are necessary and crucial for treating bacterial infections, their misuse over time has contributed to a rather alarming rate of antibiotic resistance, including the development of multidrug-resistance bacteria or “super bugs.” Misuse manifests throughout all corners of public and private life; from the doctor’s office when prescribed to treat viruses; to industrial agriculture, where they are used in abundance to prevent disease in livestock. New data from the World Health Organization (WHO) and U.S. Centers for Disease Control and Prevention (CDC) confirm that rising overuse of antibiotics has already become a major public health threat worldwide.

As drug resistance increases, we will see a number of dangerous and far-reaching consequences. First, common infections like STDs, pneumonia, and “staph” infections will become increasingly difficult to treat, and in extreme cases these infections may require hospitalization or treatment with expensive and toxic second-line therapies. In fact, recent estimates suggest that every year more than 23,000 people die due to drug-resistant infections in the U.S., and many more suffer from complications caused by resistant pathogens. Further, infections will be harder to control. Health care providers are increasingly encountering highly resistant infections not only in hospitals – where such infections can easily spread between vulnerable patients – but also in outpatient care settings.

Fundamental Approaches to Slowing Resistance

Incentivize appropriate use of antibiotics. Many patients and providers underestimate the risks of using antibiotics when they are not warranted, in part because these drugs often have rapid beneficial effects for those who truly need them. In many parts of the world the perception that antibiotics carry few risks has been bolstered by their low costs and availability without a prescription or contact with a trained health care provider. Education efforts, stewardship programs, and the development of new clinical guidelines have shown some success in limiting antibiotic use, but these fixes are limited in scope and generally not perceived as cost-effective or sustainable. Broader efforts to incentivize appropriate use, coupled with economic incentives, may be more effective in changing the culture of antibiotic use. These options might include physician or hospital report cards that help impact patient provider selection, or bonuses based on standardized performance measures that can be used to report on success of promoting appropriate use. While these might create additional costs, they would likely help control rates of drug resistant infections and outweigh the costs of treating them.

Reinvigorate the drug development pipeline with novel antibiotics. There has not been a new class of antibiotics discovered in almost three decades, and companies have largely left the infectious disease space for more stable and lucrative product lines, such as cancer and chronic disease. Antibiotics have historically been inexpensive and are typically used only for short periods of time, creating limited opportunities for return on investment. In addition, unlike cancer or heart disease treatments, antibiotics lose effectiveness over time, making them unattractive for investment. Once they are on the market, the push to limit use of certain antibiotics to the most severe infections can further constrict an already weak market.

Late last year, H.R. 3742, the Antibiotic Development to Advance Patient Treatment (ADAPT) Act of 2013, was introduced and referred to the House Energy and Commerce Subcommittee on Health. If enacted, the ADAPT Act would create a streamlined development pathway to expedite the approval of antibiotics that treat limited patient populations with serious unmet medical needs. This could potentially reduce costs and development time for companies, thereby encouraging investment in this space. Regulators have indicated that they would also welcome the opportunity to evaluate benefits and risk for a more selective patient subpopulation if they could be confident the product would be used appropriately. The bill has received a great deal of support and would help address a critical public health need (I cover this topic in more detail with my colleagues Kevin Outterson, John Powers, and Mark McClellan in a recent Health Affairs paper).

Advance new economic incentives to remedy market failure. Innovative changes to pharmaceutical regulation, research and development (R&D), and reimbursement are necessary to alleviate the market failure for antibacterial drugs. A major challenge, particularly within a fee-for-service or volume-based reimbursement system, is providing economic incentives that promote investment in drug development without encouraging overuse. A number of public and private stakeholders, including the Engelberg Center for Health Care Reform and Chatham House’s Centre on Global Health Security Working Group on Antimicrobial Resistance, are exploring alternative reimbursement mechanisms that “de-link” revenue from the volume of antibiotics sold. Such a mechanism, combined with further measures to stimulate innovation, could create a stable incentive structure to support R&D.

Improve tracking and monitoring of resistance in the outpatient setting. There is increasing concern about much less rigorous surveillance capabilities in the outpatient setting, where drug-resistant infections are also on the rise. Policymakers should consider new incentives for providers and insurers to encourage a coordinated approach for tracking inpatient and outpatient resistance data. The ADAPT Act, mentioned above, also seeks to enhance monitoring of antibiotic utilization and resistance patterns. Health insurance companies can leverage resistance-related data linked to health care claims, while providers can capture lab results in electronic health records. Ultimately, this data could be linked to health and economic outcomes at the state, federal, and international levels, and provide a more comprehensive population-based understanding of the impact and spread of resistance. Current examples include the Food and Drug Administration’s (FDA) Sentinel Initiative and the Patient-Centered Outcomes Research Institute’s PCORnet initiative.

Antibiotic resistance is an urgent and persistent threat. As such, patients and providers will continue to require new antibiotics as older drugs are forced into retirement by resistant pathogens. Stewardship efforts will remain critical in the absence of game-changing therapies that parry resistance mechanisms. Lastly, a coordinated surveillance approach that involves diverse stakeholder groups is needed to understand the health and economic consequences of drug resistance, and to inform antibiotic development and stewardship efforts.

Editor's note: This blog was originally posted in May 2014 on Brookings UpFront.

Authors

While antibiotics are necessary and crucial for treating bacterial infections, their misuse over time has contributed to a rather alarming rate of antibiotic resistance, including the development of multidrug-resistance bacteria or “super bugs.” Misuse manifests throughout all corners of public and private life; from the doctor’s office when prescribed to treat viruses; to industrial agriculture, where they are used in abundance to prevent disease in livestock. New data from the World Health Organization (WHO) and U.S. Centers for Disease Control and Prevention (CDC) confirm that rising overuse of antibiotics has already become a major public health threat worldwide.

As drug resistance increases, we will see a number of dangerous and far-reaching consequences. First, common infections like STDs, pneumonia, and “staph” infections will become increasingly difficult to treat, and in extreme cases these infections may require hospitalization or treatment with expensive and toxic second-line therapies. In fact, recent estimates suggest that every year more than 23,000 people die due to drug-resistant infections in the U.S., and many more suffer from complications caused by resistant pathogens. Further, infections will be harder to control. Health care providers are increasingly encountering highly resistant infections not only in hospitals – where such infections can easily spread between vulnerable patients – but also in outpatient care settings.

Fundamental Approaches to Slowing Resistance

Incentivize appropriate use of antibiotics. Many patients and providers underestimate the risks of using antibiotics when they are not warranted, in part because these drugs often have rapid beneficial effects for those who truly need them. In many parts of the world the perception that antibiotics carry few risks has been bolstered by their low costs and availability without a prescription or contact with a trained health care provider. Education efforts, stewardship programs, and the development of new clinical guidelines have shown some success in limiting antibiotic use, but these fixes are limited in scope and generally not perceived as cost-effective or sustainable. Broader efforts to incentivize appropriate use, coupled with economic incentives, may be more effective in changing the culture of antibiotic use. These options might include physician or hospital report cards that help impact patient provider selection, or bonuses based on standardized performance measures that can be used to report on success of promoting appropriate use. While these might create additional costs, they would likely help control rates of drug resistant infections and outweigh the costs of treating them.

Reinvigorate the drug development pipeline with novel antibiotics. There has not been a new class of antibiotics discovered in almost three decades, and companies have largely left the infectious disease space for more stable and lucrative product lines, such as cancer and chronic disease. Antibiotics have historically been inexpensive and are typically used only for short periods of time, creating limited opportunities for return on investment. In addition, unlike cancer or heart disease treatments, antibiotics lose effectiveness over time, making them unattractive for investment. Once they are on the market, the push to limit use of certain antibiotics to the most severe infections can further constrict an already weak market.

Late last year, H.R. 3742, the Antibiotic Development to Advance Patient Treatment (ADAPT) Act of 2013, was introduced and referred to the House Energy and Commerce Subcommittee on Health. If enacted, the ADAPT Act would create a streamlined development pathway to expedite the approval of antibiotics that treat limited patient populations with serious unmet medical needs. This could potentially reduce costs and development time for companies, thereby encouraging investment in this space. Regulators have indicated that they would also welcome the opportunity to evaluate benefits and risk for a more selective patient subpopulation if they could be confident the product would be used appropriately. The bill has received a great deal of support and would help address a critical public health need (I cover this topic in more detail with my colleagues Kevin Outterson, John Powers, and Mark McClellan in a recent Health Affairs paper).

Advance new economic incentives to remedy market failure. Innovative changes to pharmaceutical regulation, research and development (R&D), and reimbursement are necessary to alleviate the market failure for antibacterial drugs. A major challenge, particularly within a fee-for-service or volume-based reimbursement system, is providing economic incentives that promote investment in drug development without encouraging overuse. A number of public and private stakeholders, including the Engelberg Center for Health Care Reform and Chatham House’s Centre on Global Health Security Working Group on Antimicrobial Resistance, are exploring alternative reimbursement mechanisms that “de-link” revenue from the volume of antibiotics sold. Such a mechanism, combined with further measures to stimulate innovation, could create a stable incentive structure to support R&D.

Improve tracking and monitoring of resistance in the outpatient setting. There is increasing concern about much less rigorous surveillance capabilities in the outpatient setting, where drug-resistant infections are also on the rise. Policymakers should consider new incentives for providers and insurers to encourage a coordinated approach for tracking inpatient and outpatient resistance data. The ADAPT Act, mentioned above, also seeks to enhance monitoring of antibiotic utilization and resistance patterns. Health insurance companies can leverage resistance-related data linked to health care claims, while providers can capture lab results in electronic health records. Ultimately, this data could be linked to health and economic outcomes at the state, federal, and international levels, and provide a more comprehensive population-based understanding of the impact and spread of resistance. Current examples include the Food and Drug Administration’s (FDA) Sentinel Initiative and the Patient-Centered Outcomes Research Institute’s PCORnet initiative.

Antibiotic resistance is an urgent and persistent threat. As such, patients and providers will continue to require new antibiotics as older drugs are forced into retirement by resistant pathogens. Stewardship efforts will remain critical in the absence of game-changing therapies that parry resistance mechanisms. Lastly, a coordinated surveillance approach that involves diverse stakeholder groups is needed to understand the health and economic consequences of drug resistance, and to inform antibiotic development and stewardship efforts.

Editor's note: This blog was originally posted in May 2014 on Brookings UpFront.

Authors

]]>
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http://www.brookings.edu/blogs/techtank/posts/2015/02/24-ehr-records-hostage-yaraghi?rssid=health{166F4DA5-0A2D-4FA7-8AB0-DE673C867C37}http://webfeeds.brookings.edu/~/85883461/0/brookingsrss/topics/health~Electronic-Health-Record-Vendors-Take-Patient-Data-Hostage-What-Should-We-DoElectronic Health Record Vendors Take Patient Data Hostage: What Should We Do?

In today’s interconnected world it seems intuitively true that instant access to comprehensive medical patient histories will help physicians to provide better care at a lower cost. This simple argument was persuasive enough for the federal government to spend $26 billion to incent medical providers to adopt electronic health records (EHR) systems so that they can electronically share medical records. The initial investment appeared to be large, but it was an economically sound solution to control the rising healthcare expenditure. The resulting HITECH act is one of the few healthcare laws that maintains bipartisan support. To establish a nationwide health information exchange network, officials designed a two-stage plan. First, incent every medical provider to create an electronic archive of their patients’ medical records. Second, connect these electronic archives together so that the providers can share their patients’ records. The $26 billion in federal incentives was a lucrative source of revenue for hundreds of different software vendors to develop and aggressively market their own type of EHR products in a medical market that knew little about information technology. According to the Office of National Coordinator for Health IT, in 2008, less than 10 percent of hospitals had basic EHR systems, and a mere five years after, 94 percent of the hospitals use a certified EHR system.

The next step forward is to connect these electronic silos together so that physicians can share their patients’ records. The billions of dollars in federal spending will only have any tangible benefit if this is done successfully. EHR vendors have taken patient data hostage and are not willing to release it unless they receive a big ransom. They typically claim that technical problems limit the interoperability of their products. This prevents physicians from sharing their patient records with other doctors. This is like T-Mobile claiming that its users cannot make calls to AT&T customers. The claimed interoperability limitation does not end here. The vendors are proposing hefty charges to allow data sharing between their own customers.

As I have discussed in detail before, this a hole that the government has dug for itself. A nationwide health information exchange network sounds great, but it is not possible to achieve this goal without the proper alignment of economic benefits for every player in the healthcare market. In the face of this problem, the government has three choices:

Pay EHR vendors the ransom that they are asking to release their hostage and allow sharing of the patient data among medical providers.

Regulate the industry and force the EHR vendors to allow sharing of patient data among medical providers.

Do nothing.

The government appears to be following the first plan. Officials had not anticipated interoperability challenges and assumed that all of the providers with EHR systems would have the capacity to exchange records. Based on this assumption, the third stage of the EHR incentives program was designed to encourage physicians to actively engage in the exchange of medical records. Today nearly every physician has an EHR system and although many of them also want to exchange information, the EHR vendors do not allow them. The incentives, which were initially planned to encourage physicians, will end up with EHR vendors and help drive future profits. As Rep. Phil Gingrey (R-GA) put it, "we have been subsidizing systems that block information instead of allowing for information transfers, which was never the intent of the [HITECH] statute.”

Regulating the industry seems like the only feasible solution to this problem. Rep. Michael Burgess (R-TX), the leader of the House Energy and Commerce trade subcommittee is drawing up a bill to enforce data sharing. The benefits of regulating the EHR industry, if any, will take a very long time to become tangible. The EHR vendors will furiously push back against any kind of regulation and will insist that technical challenges are a real barrier to interoperability. Congress is poorly situated to adjudicate this claim. Time is a critical factor in the long term success of HITECH plans, which threatens the viability of this strategy.

The best solution for the government is to do nothing. The new pay for performance payment methods in which the medical providers are being paid a fixed amount for treating patients would drive them to become more efficient and increase their profit margin by seeking solutions such as health information exchange to cut costs. Because the market for new EHR products is now saturated, the only revenue source for EHR vendors are charges for data exchange. Currently, they can get away with outlandish charges because they know the incentives from the federal government allow doctors to cover their costs. But if the free money from the government were to stop, then EHR vendors would have to persuade the physicians to pay for the exchange fees. Just like any other service, the highest price that the medical providers would pay is equal to the value of the service for them. If the electronic exchange of information helps medical providers to cut back on their costs and save some money they will be willing to pay a fair price for it. EHR vendors will end up lowering their fees to a reasonable level or will eventually go out of business.

Authors

In today’s interconnected world it seems intuitively true that instant access to comprehensive medical patient histories will help physicians to provide better care at a lower cost. This simple argument was persuasive enough for the federal government to spend $26 billion to incent medical providers to adopt electronic health records (EHR) systems so that they can electronically share medical records. The initial investment appeared to be large, but it was an economically sound solution to control the rising healthcare expenditure. The resulting HITECH act is one of the few healthcare laws that maintains bipartisan support. To establish a nationwide health information exchange network, officials designed a two-stage plan. First, incent every medical provider to create an electronic archive of their patients’ medical records. Second, connect these electronic archives together so that the providers can share their patients’ records. The $26 billion in federal incentives was a lucrative source of revenue for hundreds of different software vendors to develop and aggressively market their own type of EHR products in a medical market that knew little about information technology. According to the Office of National Coordinator for Health IT, in 2008, less than 10 percent of hospitals had basic EHR systems, and a mere five years after, 94 percent of the hospitals use a certified EHR system.

The next step forward is to connect these electronic silos together so that physicians can share their patients’ records. The billions of dollars in federal spending will only have any tangible benefit if this is done successfully. EHR vendors have taken patient data hostage and are not willing to release it unless they receive a big ransom. They typically claim that technical problems limit the interoperability of their products. This prevents physicians from sharing their patient records with other doctors. This is like T-Mobile claiming that its users cannot make calls to AT&T customers. The claimed interoperability limitation does not end here. The vendors are proposing hefty charges to allow data sharing between their own customers.

As I have discussed in detail before, this a hole that the government has dug for itself. A nationwide health information exchange network sounds great, but it is not possible to achieve this goal without the proper alignment of economic benefits for every player in the healthcare market. In the face of this problem, the government has three choices:

Pay EHR vendors the ransom that they are asking to release their hostage and allow sharing of the patient data among medical providers.

Regulate the industry and force the EHR vendors to allow sharing of patient data among medical providers.

Do nothing.

The government appears to be following the first plan. Officials had not anticipated interoperability challenges and assumed that all of the providers with EHR systems would have the capacity to exchange records. Based on this assumption, the third stage of the EHR incentives program was designed to encourage physicians to actively engage in the exchange of medical records. Today nearly every physician has an EHR system and although many of them also want to exchange information, the EHR vendors do not allow them. The incentives, which were initially planned to encourage physicians, will end up with EHR vendors and help drive future profits. As Rep. Phil Gingrey (R-GA) put it, "we have been subsidizing systems that block information instead of allowing for information transfers, which was never the intent of the [HITECH] statute.”

Regulating the industry seems like the only feasible solution to this problem. Rep. Michael Burgess (R-TX), the leader of the House Energy and Commerce trade subcommittee is drawing up a bill to enforce data sharing. The benefits of regulating the EHR industry, if any, will take a very long time to become tangible. The EHR vendors will furiously push back against any kind of regulation and will insist that technical challenges are a real barrier to interoperability. Congress is poorly situated to adjudicate this claim. Time is a critical factor in the long term success of HITECH plans, which threatens the viability of this strategy.

The best solution for the government is to do nothing. The new pay for performance payment methods in which the medical providers are being paid a fixed amount for treating patients would drive them to become more efficient and increase their profit margin by seeking solutions such as health information exchange to cut costs. Because the market for new EHR products is now saturated, the only revenue source for EHR vendors are charges for data exchange. Currently, they can get away with outlandish charges because they know the incentives from the federal government allow doctors to cover their costs. But if the free money from the government were to stop, then EHR vendors would have to persuade the physicians to pay for the exchange fees. Just like any other service, the highest price that the medical providers would pay is equal to the value of the service for them. If the electronic exchange of information helps medical providers to cut back on their costs and save some money they will be willing to pay a fair price for it. EHR vendors will end up lowering their fees to a reasonable level or will eventually go out of business.

Event Information

The tax code is inextricably linked to the Affordable Care Act. Insurance subsidies are delivered through tax credits. People must report their insurance status on their 1040s and if they have no coverage, must pay penalties. Those whose subsidies turned out to be too high or too low must reconcile those payments when they file their returns. This connection makes the tax filing moment an ideal time to enroll lower-income households in Medicaid or a health insurance exchange plan, and to update income eligibility to reduce future penalties.

On February 24, the Urban-Brookings Tax Policy Center convened an event examining how tax filers will be affected by the ACA and discussed ways to improve the process. There were four short presentations followed by discussion among the speakers.

Event Information

The tax code is inextricably linked to the Affordable Care Act. Insurance subsidies are delivered through tax credits. People must report their insurance status on their 1040s and if they have no coverage, must pay penalties. Those whose subsidies turned out to be too high or too low must reconcile those payments when they file their returns. This connection makes the tax filing moment an ideal time to enroll lower-income households in Medicaid or a health insurance exchange plan, and to update income eligibility to reduce future penalties.

On February 24, the Urban-Brookings Tax Policy Center convened an event examining how tax filers will be affected by the ACA and discussed ways to improve the process. There were four short presentations followed by discussion among the speakers.

Audio

Transcript

Event Materials

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http://www.brookings.edu/research/papers/2015/02/23-medical-device-postmarket-surveillance-roadmap-daniel?rssid=health{576F3C4B-3A4C-4032-83E6-606C06E6D60F}http://webfeeds.brookings.edu/~/85814905/0/brookingsrss/topics/health~Strengthening-patient-care-Building-an-effective-national-medical-device-surveillance-systemStrengthening patient care: Building an effective national medical device surveillance system

Medical devices play a critical role in health care. Access to reliable and meaningful information about the safety, effectiveness, and quality of devices is essential to inform care and improve patient outcomes. While the Food and Drug Administration (FDA) has a public health mission to monitor the safety and effectiveness of devices, everyone has a vested interest in improving information about medical products. Patients and clinicians need information about devices to inform their clinical decisions. Organizations responsible for paying for care want to ensure that the products they cover lead to optimal patient outcomes. Manufacturers want timely feedback on device performance to support patient safety and drive innovation.

The Center for Devices and Radiologic Health (CDRH) at FDA put forth an action plan to strengthen the nation’s postmarket surveillance system for medical devices in 2012. This plan was developed in response to concerns about the nation’s ability to monitor the safety and effectiveness of medical devices, meet the challenges of supporting medical device innovation, and inform the evolving learning healthcare system. As part of this work, CDRH called for the creation of a multi-stakeholder Planning Board to identify the governance policies, priorities, and business models necessary to develop a sustainable national system for medical device postmarket surveillance. Under a cooperative agreement with CDRH, the Engelberg Center for Health Care Reform at the Brookings Institution convened the Planning Board in 2014. This report represents the Planning Board’s long-term vision for a National Medical Device Postmarket Surveillance System (MDS) and recommended strategies for implementation.

Building a 21st Century Solution

The Planning Board’s recommendations are focused on creating a collaborative system capable of supporting the development, regulation, and use of innovative medical devices. This system should be a component of the emerging national health information infrastructure. It should minimize burden by using data captured as an integral part of care to efficiently generate meaningful and reliable information about medical devices. The system needs to be driven by the need to improve public health and patient care. To accomplish these objectives, the Planning Board proposes the following mission:

TheNational Medical Device Postmarket Surveillance System (MDS) supports optimal patient care by leveraging the experiences of patients to inform decisions about medical device safety, effectiveness, and quality in order to promote the public health.

To support this mission, MDS should be responsible for coordinating medical devices postmarket evidence activities to ensure that there is a harmonized national approach focused on improving evidence and reducing burden. MDS should also build and facilitate access to network of data partners that utilizes the emerging national health electronic information infrastructure to address medical device specific questions.

The Planning Board does not envision MDS as a stand-alone system. Instead, MDS should build upon and coordinate with other public and private sector existing programs to leverage their expertise and resources. For example, MDS should support Congress’ mandate to include medical devices into the Sentinel Initiative, as well as coordinate with PCORI on their efforts to build a national research network.

MDS’s primary function should be to provide better evidence on the benefits and risks of medical devices to enable active safety surveillance and more effective regulatory decision-making. The system should also seek to collaborate with other groups to support other high-priority evidence needs that could benefit from the same infrastructure, such as product tracking and utilization, clinical quality improvement, and economic analyses of medical device-related care.

The Planning Board recommends that MDS be implemented and managed by a multi-stakeholder public-private partnership with sufficient authority and funding to support its activities. To support broad participation and transparency, the MDS public-private partnership should be built around a set of organizational principles and data governance criteria focused on protecting patient privacy, meeting public health needs, balancing robust analysis and the burden of data collection, and building value for key stakeholders.

Recommended Implementation Approaches and Priorities

Years 1-2: Initiate an incubator project tasked to develop a 5-year implementation plan for MDS through fact finding activities and pilot programs. The Board recommends that the incubator project should be initiated by FDA, adequately staffed and resourced, and guided by a multi-stakeholder group with relevant medical device experience.

Years 3-7: The second phase of work will focus on the MDS implementation plan produced by the incubator project. Once selected, the MDS PPP’s leadership should set and oversee the system’s strategic development priorities, begin to build and sustain broader stakeholder participation, oversee implementation of the organizational plan, and establish system performance measures.

Some of the important challenges the MDS PPP must address during implementation include: (1) supporting a multi-pronged approach to ensure widespread adoption and use of UDIs in electronic health care data; (2) minimizing the burden of data capture and sharing; (3) developing policies to ensure the protection of patients and their privacy; and (4) building the capabilities to provide value to a broad group of stakeholders.

The Planning Board believes that improved medical device surveillance is a public health and national priority and that the most effective way to address this priority is through the broad public-private partnership described in the report.

Authors

Medical devices play a critical role in health care. Access to reliable and meaningful information about the safety, effectiveness, and quality of devices is essential to inform care and improve patient outcomes. While the Food and Drug Administration (FDA) has a public health mission to monitor the safety and effectiveness of devices, everyone has a vested interest in improving information about medical products. Patients and clinicians need information about devices to inform their clinical decisions. Organizations responsible for paying for care want to ensure that the products they cover lead to optimal patient outcomes. Manufacturers want timely feedback on device performance to support patient safety and drive innovation.

The Center for Devices and Radiologic Health (CDRH) at FDA put forth an action plan to strengthen the nation’s postmarket surveillance system for medical devices in 2012. This plan was developed in response to concerns about the nation’s ability to monitor the safety and effectiveness of medical devices, meet the challenges of supporting medical device innovation, and inform the evolving learning healthcare system. As part of this work, CDRH called for the creation of a multi-stakeholder Planning Board to identify the governance policies, priorities, and business models necessary to develop a sustainable national system for medical device postmarket surveillance. Under a cooperative agreement with CDRH, the Engelberg Center for Health Care Reform at the Brookings Institution convened the Planning Board in 2014. This report represents the Planning Board’s long-term vision for a National Medical Device Postmarket Surveillance System (MDS) and recommended strategies for implementation.

Building a 21st Century Solution

The Planning Board’s recommendations are focused on creating a collaborative system capable of supporting the development, regulation, and use of innovative medical devices. This system should be a component of the emerging national health information infrastructure. It should minimize burden by using data captured as an integral part of care to efficiently generate meaningful and reliable information about medical devices. The system needs to be driven by the need to improve public health and patient care. To accomplish these objectives, the Planning Board proposes the following mission:

TheNational Medical Device Postmarket Surveillance System (MDS) supports optimal patient care by leveraging the experiences of patients to inform decisions about medical device safety, effectiveness, and quality in order to promote the public health.

To support this mission, MDS should be responsible for coordinating medical devices postmarket evidence activities to ensure that there is a harmonized national approach focused on improving evidence and reducing burden. MDS should also build and facilitate access to network of data partners that utilizes the emerging national health electronic information infrastructure to address medical device specific questions.

The Planning Board does not envision MDS as a stand-alone system. Instead, MDS should build upon and coordinate with other public and private sector existing programs to leverage their expertise and resources. For example, MDS should support Congress’ mandate to include medical devices into the Sentinel Initiative, as well as coordinate with PCORI on their efforts to build a national research network.

MDS’s primary function should be to provide better evidence on the benefits and risks of medical devices to enable active safety surveillance and more effective regulatory decision-making. The system should also seek to collaborate with other groups to support other high-priority evidence needs that could benefit from the same infrastructure, such as product tracking and utilization, clinical quality improvement, and economic analyses of medical device-related care.

The Planning Board recommends that MDS be implemented and managed by a multi-stakeholder public-private partnership with sufficient authority and funding to support its activities. To support broad participation and transparency, the MDS public-private partnership should be built around a set of organizational principles and data governance criteria focused on protecting patient privacy, meeting public health needs, balancing robust analysis and the burden of data collection, and building value for key stakeholders.

Recommended Implementation Approaches and Priorities

Years 1-2: Initiate an incubator project tasked to develop a 5-year implementation plan for MDS through fact finding activities and pilot programs. The Board recommends that the incubator project should be initiated by FDA, adequately staffed and resourced, and guided by a multi-stakeholder group with relevant medical device experience.

Years 3-7: The second phase of work will focus on the MDS implementation plan produced by the incubator project. Once selected, the MDS PPP’s leadership should set and oversee the system’s strategic development priorities, begin to build and sustain broader stakeholder participation, oversee implementation of the organizational plan, and establish system performance measures.

Some of the important challenges the MDS PPP must address during implementation include: (1) supporting a multi-pronged approach to ensure widespread adoption and use of UDIs in electronic health care data; (2) minimizing the burden of data capture and sharing; (3) developing policies to ensure the protection of patients and their privacy; and (4) building the capabilities to provide value to a broad group of stakeholders.

The Planning Board believes that improved medical device surveillance is a public health and national priority and that the most effective way to address this priority is through the broad public-private partnership described in the report.

Event Information

Tens of millions of medical devices are used on a daily basis in the U.S., including pacemakers, knee replacements, and glucose test strips. It is critical for providers, patients, manufacturers and others to have access to better information about the performance of these devices. Not only will this information enhance patient safety, but it will also inform the development of new and more effective products. However, in today’s current market there are limited resources and tools available to collect this information. Through a cooperative agreement with the U.S. Food and Drug Administration (FDA), the Engelberg Center for Health Care Reform formed the National Medical Device Postmarket Surveillance System Planning Board; a multi-stakeholder group tasked with building this capability and designing a system to gather this information.

On February 23, the Engelberg Center hosted a discussion that highlighted the planning board’s long-term vision, identified key considerations and implications for stakeholders, and evaluated potential opportunities to support and sustain this initiative. The event included the release of the planning board’s preliminary report.

Event Information

Tens of millions of medical devices are used on a daily basis in the U.S., including pacemakers, knee replacements, and glucose test strips. It is critical for providers, patients, manufacturers and others to have access to better information about the performance of these devices. Not only will this information enhance patient safety, but it will also inform the development of new and more effective products. However, in today’s current market there are limited resources and tools available to collect this information. Through a cooperative agreement with the U.S. Food and Drug Administration (FDA), the Engelberg Center for Health Care Reform formed the National Medical Device Postmarket Surveillance System Planning Board; a multi-stakeholder group tasked with building this capability and designing a system to gather this information.

On February 23, the Engelberg Center hosted a discussion that highlighted the planning board’s long-term vision, identified key considerations and implications for stakeholders, and evaluated potential opportunities to support and sustain this initiative. The event included the release of the planning board’s preliminary report.

Transcript

Event Materials

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http://www.brookings.edu/events/2015/02/20-good-governance-states-beshear-hickenlooper?rssid=health{D1D800F6-81E7-41A9-8829-CF2396818BFB}http://webfeeds.brookings.edu/~/85619029/0/brookingsrss/topics/health~Promoting-good-governance-Lessons-from-the-statesPromoting good governance: Lessons from the states

Event Information

Partisan gridlock in Washington has led many Americans to question the effectiveness of political leadership. But, in stark contrast to dysfunction at the federal level, successes at the state level illustrate that bipartisan governance is not only possible, but realistic and productive. How can state government accomplishments be a model for the federal government during this time of intense polarization?

On February 20, the Center for Effective Public Management hosted governors Steve Beshear (D-Ky.) and John Hickenlooper (D-Colo.) to provide insight on the notable performance of their states’ leadership in comparison with the paralyzing gridlock of the national government. Brookings Fellow John Hudak facilitated a discussion with the two-term governors to examine their implementation of innovative public policies despite overwhelming challenges.

Event Information

Partisan gridlock in Washington has led many Americans to question the effectiveness of political leadership. But, in stark contrast to dysfunction at the federal level, successes at the state level illustrate that bipartisan governance is not only possible, but realistic and productive. How can state government accomplishments be a model for the federal government during this time of intense polarization?

On February 20, the Center for Effective Public Management hosted governors Steve Beshear (D-Ky.) and John Hickenlooper (D-Colo.) to provide insight on the notable performance of their states’ leadership in comparison with the paralyzing gridlock of the national government. Brookings Fellow John Hudak facilitated a discussion with the two-term governors to examine their implementation of innovative public policies despite overwhelming challenges.

Audio

Transcript

Event Materials

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http://www.brookings.edu/blogs/health360/posts/2015/02/20-effects-not-expanding-medicaid-barofsky?rssid=health{271742E1-AAB0-4B70-ADA4-4CEE213778AE}http://webfeeds.brookings.edu/~/85650150/0/brookingsrss/topics/health~What-are-the-effects-of-not-expanding-MedicaidWhat are the effects of not expanding Medicaid?

An essential provision of the Affordable Care Act (ACA) is expanding Medicaid coverage to low-income Americans (those with incomes less than 138 percent of the federal poverty level (FPL)). However, a Supreme Court decision in 2012 made Medicaid expansion optional for states and currently 28 states plus the District of Columbia have agreed to do so. From 2014 to 2016, the federal government will cover 100 percent of expansion cost. Afterward, federal support will decline each year, reaching and remaining at 90 percent by 2020.

Medicaid expansion has of course become a highly politicized issue, partly because it represents one of the few opportunities Republicans have to express disagreement with the ACA through policy, instead of voting on bills with no chance of leaving Congress. Moreover, conservatives often worry about the cost burden of growing Medicaid and have expressed that the current program discourages personal responsibility. Therefore, in addition to the 22 states that have rejected expansion, six others have expanded with adjustments to the traditional model, including charging insurance premiums[i], copayments to access care, and monthly payments that decline when beneficiaries engage in healthy behaviors like smoking cessation and obesity reduction.

Indiana became the most recent state to expand Medicaid, when the federal government approved its version, which includes premiums, health savings accounts type transfers, and for the first time, locking residents out of coverage for six months if they fail to pay premiums. Meanwhile, concurrent efforts by the governors of heavily Republican states, Tennessee and Wyoming, had their expansion plans blocked by state legislatures, as previously occurred in Utah and Florida.

In the 22 states that have not expanded, there is a substantial gap in coverage between those with incomes too high to qualify for their state’s current Medicaid program, but too low to obtain federal premium subsidies on insurance exchanges. Given that 21 of these 22 states provide no coverage for adults without dependent children, non-expansion produces the counterintuitive situation in which the poorest are denied coverage, while those with incomes above 138 percent FPL receive premium subsidies to buy health insurance.

Before the ACA, researchers noted that expanding Medicaid eligibility may not necessarily lead to greater insurance coverage because:

Many Medicaid eligibles are not subject to the federal mandate as their income falls below the federal filing threshold

Pre-ACA, Medicaid uptake among the eligible population was far from complete (estimated at 62 percent), and

Current Results from the Medicaid “Expanders”

First, despite these challenges, the ACA has significantly expanded Medicaid enrollment. In fact, Medicaid enrollment has increased by 18 percent in the last year; offering coverage to 69 million low-income Americans as of November 2014. For states that expanded Medicaid, enrollment increased 25.5 percent, while non-expansion states saw a rise of 7 percent. One of the most dramatic coverage expansions occurred in Kentucky, where a combination of Medicaid expansion, low incomes, and a historically very low income eligibility threshold, increased coverage by over 70 percent.

The Urban Institute estimated that non-expansion states are causing six million people across the U.S. to remain uninsured in 2016.[ii] Texas represents the largest number of uninsured at 1.5 million, with three states—Texas, Florida and Georgia—accounting for half of that total. The report also estimates that states not expanding will forego $37 billion in federal matching funds and $14 billion in hospital reimbursement in 2016.

Second, multiple studies demonstrate that the short- and long-term benefits of Medicaid coverage are substantial. A study of Oregon’s Medicaid program, which used a lottery to determine eligibility, found higher utilization rates across hospitalizations, primary care, and preventive care, but also lower out-of-pocket medical expenses and medical debt, and better self-reported health outcomes compared to the uninsured. The study also found a decline in depression and catastrophic expenditures from health spending. And although health benefits are less clear, an earlier study also showed that Medicaid expansion reduces all-cause mortality.

Finally, while many critics point to the large cost of Medicaid programs, one recent analysis indicates that Medicaid eligibility for children produces enough additional tax collections over the long term to approximately pay for itself. The study found that childhood Medicaid raised cumulative taxes paid, reduced government earned income tax credit transfers, and increased cumulative wages among females.

The evidence therefore indicates that the benefits of Medicaid coverage are large and that the long-term public cost may at least be partly mitigated by higher tax recipients from beneficiaries over time, while non-expansion states are forgoing significant federal transfers. Given that an increasingly large share of government aid has been focused on the working poor instead of those with the lowest incomes, Medicaid expansion represents an opportunity to improve the welfare of those worst off as this group continues to recover from the Great Recession.

Note: This post was updated on February 25 to correct the number of states that have expanded Medicaid from 38 to 28.

[i] Premiums only apply to those with incomes over 100 percent FPL as CMS rejected charging premiums to those making less.

[ii] Excludes estimates of the uninsured from Indiana and Pennsylvania because these states have subsequently expanded Medicaid.

Authors

An essential provision of the Affordable Care Act (ACA) is expanding Medicaid coverage to low-income Americans (those with incomes less than 138 percent of the federal poverty level (FPL)). However, a Supreme Court decision in 2012 made Medicaid expansion optional for states and currently 28 states plus the District of Columbia have agreed to do so. From 2014 to 2016, the federal government will cover 100 percent of expansion cost. Afterward, federal support will decline each year, reaching and remaining at 90 percent by 2020.

Medicaid expansion has of course become a highly politicized issue, partly because it represents one of the few opportunities Republicans have to express disagreement with the ACA through policy, instead of voting on bills with no chance of leaving Congress. Moreover, conservatives often worry about the cost burden of growing Medicaid and have expressed that the current program discourages personal responsibility. Therefore, in addition to the 22 states that have rejected expansion, six others have expanded with adjustments to the traditional model, including charging insurance premiums[i], copayments to access care, and monthly payments that decline when beneficiaries engage in healthy behaviors like smoking cessation and obesity reduction.

Indiana became the most recent state to expand Medicaid, when the federal government approved its version, which includes premiums, health savings accounts type transfers, and for the first time, locking residents out of coverage for six months if they fail to pay premiums. Meanwhile, concurrent efforts by the governors of heavily Republican states, Tennessee and Wyoming, had their expansion plans blocked by state legislatures, as previously occurred in Utah and Florida.

In the 22 states that have not expanded, there is a substantial gap in coverage between those with incomes too high to qualify for their state’s current Medicaid program, but too low to obtain federal premium subsidies on insurance exchanges. Given that 21 of these 22 states provide no coverage for adults without dependent children, non-expansion produces the counterintuitive situation in which the poorest are denied coverage, while those with incomes above 138 percent FPL receive premium subsidies to buy health insurance.

Before the ACA, researchers noted that expanding Medicaid eligibility may not necessarily lead to greater insurance coverage because:

Many Medicaid eligibles are not subject to the federal mandate as their income falls below the federal filing threshold

Pre-ACA, Medicaid uptake among the eligible population was far from complete (estimated at 62 percent), and

Current Results from the Medicaid “Expanders”

First, despite these challenges, the ACA has significantly expanded Medicaid enrollment. In fact, Medicaid enrollment has increased by 18 percent in the last year; offering coverage to 69 million low-income Americans as of November 2014. For states that expanded Medicaid, enrollment increased 25.5 percent, while non-expansion states saw a rise of 7 percent. One of the most dramatic coverage expansions occurred in Kentucky, where a combination of Medicaid expansion, low incomes, and a historically very low income eligibility threshold, increased coverage by over 70 percent.

The Urban Institute estimated that non-expansion states are causing six million people across the U.S. to remain uninsured in 2016.[ii] Texas represents the largest number of uninsured at 1.5 million, with three states—Texas, Florida and Georgia—accounting for half of that total. The report also estimates that states not expanding will forego $37 billion in federal matching funds and $14 billion in hospital reimbursement in 2016.

Second, multiple studies demonstrate that the short- and long-term benefits of Medicaid coverage are substantial. A study of Oregon’s Medicaid program, which used a lottery to determine eligibility, found higher utilization rates across hospitalizations, primary care, and preventive care, but also lower out-of-pocket medical expenses and medical debt, and better self-reported health outcomes compared to the uninsured. The study also found a decline in depression and catastrophic expenditures from health spending. And although health benefits are less clear, an earlier study also showed that Medicaid expansion reduces all-cause mortality.

Finally, while many critics point to the large cost of Medicaid programs, one recent analysis indicates that Medicaid eligibility for children produces enough additional tax collections over the long term to approximately pay for itself. The study found that childhood Medicaid raised cumulative taxes paid, reduced government earned income tax credit transfers, and increased cumulative wages among females.

The evidence therefore indicates that the benefits of Medicaid coverage are large and that the long-term public cost may at least be partly mitigated by higher tax recipients from beneficiaries over time, while non-expansion states are forgoing significant federal transfers. Given that an increasingly large share of government aid has been focused on the working poor instead of those with the lowest incomes, Medicaid expansion represents an opportunity to improve the welfare of those worst off as this group continues to recover from the Great Recession.

Note: This post was updated on February 25 to correct the number of states that have expanded Medicaid from 38 to 28.

[i] Premiums only apply to those with incomes over 100 percent FPL as CMS rejected charging premiums to those making less.

[ii] Excludes estimates of the uninsured from Indiana and Pennsylvania because these states have subsequently expanded Medicaid.

The program is a leadership development initiative that draws upon four presidential centers that “have partnered to bring together a select group of leaders who have the desire and capacity to take their leadership strengths to a higher level in order to help their communities and our country.” Scholars will engage in a six-month, executive education program beginning at Mount Vernon and then travel to all four presidential centers—those of Lyndon B. Johnson, George H.W. Bush, William J. Clinton, and George W. Bush—“to learn from former presidents, key administration officials, and leading academics to learn and put into practice varying approaches to leadership, develop a network of peers, and exchange ideas with mentors and others who can help them make an impact in their communities.”

The program is a leadership development initiative that draws upon four presidential centers that “have partnered to bring together a select group of leaders who have the desire and capacity to take their leadership strengths to a higher level in order to help their communities and our country.” Scholars will engage in a six-month, executive education program beginning at Mount Vernon and then travel to all four presidential centers—those of Lyndon B. Johnson, George H.W. Bush, William J. Clinton, and George W. Bush—“to learn from former presidents, key administration officials, and leading academics to learn and put into practice varying approaches to leadership, develop a network of peers, and exchange ideas with mentors and others who can help them make an impact in their communities.”

Visit her web bio page for more her bio and list of research and commentary.

Authors

Fred Dews

Image Source: Paul Morigi

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http://www.brookings.edu/blogs/health360/posts/2015/02/18-open-data-reveal-and-correct-faults-in-health-system-patel?rssid=health{8A40CDA6-2443-4AFE-AE85-FF2CC8011CA1}http://webfeeds.brookings.edu/~/85532479/0/brookingsrss/topics/health~How-open-data-can-revealand-correct-the-faults-in-our-health-systemHow open data can reveal--and correct-- the faults in our health system

Note: This post originally appeared in a February 18, 2015 Health Affairs Blog.

Our goal here, like many before us, is to highlight striking disparities in this dataset (despite its limitations); attempt to understand why they occur; and provide opportunities to address them.

We examine three major issues: geographic variation; individual provider variation; and variation across care settings. Finally, we outline recommendations for future data releases to encourage more practical analyses.

Geographic Variation in Practice Patterns

A popular example highlighted by the CMS data was the rate of use of Lucentis--a drug prescribed for patients with age-related macular degeneration (AMD). Although a clinical study demonstrated similar outcomes for Lucentis ($2,000 per dose) versus Avastin ($50 per dose), the CMS data revealed total Lucentis spending of $1 billion. Reports also highlighted several ophthalmologists whose Lucentis billings were so high that they can only be described as “outliers.”

We analyzed the geographic pattern of Lucentis use by looking at the proportion of unique beneficiaries who received Lucentis by state (Exhibit 1).1 The states showing the highest proportion of Lucentis administration were Connecticut (82 percent), New York (67 percent), Iowa (66 percent), and Kansas (64 percent).

On the other hand, no beneficiaries received Lucentis in Alaska and Wyoming, and in South Carolina, Montana, and Idaho less than 10 percent of beneficiaries received Lucentis.

Exhibit 1: Percentage of Medicare Part B Beneficiaries that Were Prescribed Lucentis by Ophthalmologists by State, Year 2012

We also looked at the mix of Lucentis and Avastin usage by calculating the percentage of providers within a state administering only Lucentis (Exhibit 2). In 15 states, over 25 percent of ophthalmologists administered only Lucentis. This was highest in Connecticut, where over 24 of the 32 providers followed this pattern.

However, in the majority of states, most providers administered a mix of the two drugs, indicating that they potentially took patient circumstances and costs into account, even though Avastin is considered an off-label drug for AMD. When the Office of the Inspector General (OIG) conducted a study about the incentives of physicians to provide Avastin over Lucentis, 70 percent of physicians responded that cost was the primary factor, 45 percent reported that effectiveness was a reason, and 40 percent gave patient insurance coverage as a reason.

Articles have criticized high Lucentis users, but the number of providers administering Avastin instead of Lucentis (or a mix of both)---even though economic incentives encourage Lucentis, and Avastin is considered off-label for this particular condition---shows that many providers are willing to think not just of patient outcomes, but of costs as well.

Exhibit 2: Percentage of Ophthalmologists Prescribing Only Lucentis to Medicare Part B Beneficiaries by State, Year 2012

Variation Across Sites of Care

Medicare reimburses for procedures and services differently depending on where they are provided. The justification is to offset the higher overhead costs of certain facilities (e.g. hospitals and surgical centers compared to physician offices).

However, this reimbursement mechanism can incentivize providers to conduct services in higher-paying settings when unnecessary, as well as to fraudulently bill for such settings even when services are delivered in lower-paying sites. For example, an OIG study found that in a sample of 100 services, providers incorrectly attribute the site of service, resulting in overpayments.

We examined sites of service for non-complex office visits across gastroenterology, cardiology, and oncology -- three specialties that tend to deliver care across a range of sites. Medicare reimbursement is higher for hospital visits as compared to those in a physician office.

Overall, we found that most doctors bill regular, level 3 evaluation and management visits in non-hospital settings. Oncologists have the highest percentage billed in hospital-type facilities --15 percent of non-complex office visits. In this case, we were limited in our analysis because the dataset does not include the additional amount that is paid in hospital settings.

Over and Under-Utilization of Procedures and Services

Improper utilization of procedures can often be indicators of medical inefficiency or fraud. One analysis of possible overutilization pulled from this dataset has been conducted by the investigative reporting nonprofit ProPublica.

Since Medicare codes patient visits on a scale of complexity, one being the least complex and five being the most complex, ProPublica highlighted providers billing for mostly complex, expensive visits at seemingly unexplainably high rates.

Their analysis spurred conversations around Medicare billing practices for outpatient visits -- in general, it was considered unlikely that providers should only be billing at the highest complexity levels; patient-level data on outcomes or risk adjustment—not included in the data release—would unlikely justify such a pattern.

Recommendations for Future Data Releases

Integrate Data Sources to Identify Harmful Financial Incentives. As more health care data sources are released into the public domain, these can be integrated to conduct deeper analyses and achieve a fuller view of a provider’s practice. For example, in September 2014, Medicare released the Open Payments dataset, which contains information on the financial relationships between providers and pharmaceutical and medical device companies.

Though this dataset is currently quite limited in its usefulness to researchers, if later versions are improved, they could be linked to the Medicare Part B physician data to uncover whether providers delivering unusually high concentrations of specific services, such as outpatient prescription drugs or durable medical equipment, are receiving payments from pharmaceutical and medical device companies for their provision.

To gain a better understanding of a provider’s quality of care, quality reporting data should also be integrated in future datasets. For example, information could be included from the Physician Quality Reporting System (PQRS) – a program that provides physicians with payment incentives and adjustments to adequately report quality data.

Develop a Continual Data Verification System. Physician advocates have voiced concern that the data included in the Medicare physician payment data could be erroneous and thus misleading. For example, because clinicians working under a physician’s supervision can bill under their name (or National Provider Identifier), in the current dataset it may appear as though a single physician has provided more services than they actually have.

Specialty societies have therefore suggested that, in future data releases, physicians should have the ability to review and correct potential mistakes before the data are published. Physicians were in fact afforded the ability to review and dispute the Open Payments data before its release, through the use of a government website. However, physician advocates still criticized the review process as too rushed and cumbersome.

This process must therefore be better streamlined and physicians should be allowed to review and update their information (e.g. changes of address) on a continual basis, as needed.

Render Health Care Data More Accessible to All Researchers.Researcher access to Medicare health care datasets is often limited due to excessive costs for their use and substantial delays in gaining access. Currently, to gain access to a multitude of useful Medicare provider data, researchers must pay a fee that can exceed $100,000.

Moreover, the data files themselves are often unwieldy, requiring the use of expensive statistical programs for their analysis. Both the cost and complexity of these datasets means that their use by independent researchers and analysts is hampered. To propel greater analysis of this information, CMS should change its data sharing policies to render datasets less expensive and more accessible to a wider range of researchers.

Include Facility Cost Data.As outlined in sections above, inclusion of facility cost information could help better identify those providers who deliver services in higher-paying hospital settings, when they could be delivered in lower cost community or physician office settings. The inclusion of facility cost data could also allow deeper analyses on specific subspecialties and procedures, and create further evidence on the need for facility payment methodologies that are site neutral.

In fact, CMS and the Medicare Payment Advisory Commission (MedPAC) have both proposed plans to implement site-neutral payments, but further research by a wider range of organizations must be lead to help determine suitable subspecialties and procedure codes where payment differences are particularly egregious.

Include Patient-level Data. The current dataset lacks patient information such as age or diagnosis, information that is necessary to determine whether a service provided is indeed low-value to a specific type of patient. Taking the case of prostate cancer screenings---which are deemed unnecessary for men over the age 75---a service might only be low-value for patients of certain ages, as well as with certain health care conditions.

As many recommendations are based on a patient’s age, if releasing individual patient-level age data poses a problem, such as privacy, CMS should consider grouping patients into five-year cohorts (i.e. 60-65, 66-70, etc.). In general, the inclusion of patient information, even if it were aggregated to the individual provider level, would be useful to ensure that findings can be risk-adjusted and that providers serving higher-risk and more complex patient populations are not criticized for higher spending patterns that result.

Include Geographic Benchmarks.Research has shown that health care utilization varies based on geography. Therefore, geographic benchmarks, perhaps by hospital referral region, based on local demographics, must be included in future datasets to enhance geographic comparisons of utilizations rates for individual providers and health systems, as well as procedures, tests, and prescriptions.

Include Time-series Data.The 2014 dataset only includes information from 2012. In future releases, we not only recommend that the data be up-to-date, but we also suggest that more historical data be provided so as to allow deeper analyses of provider utilization and cost trends over time.

Though the release of the Medicare physician payment dataset signified a historically large step toward transparency, there is still a long way to go before these data can be considered useful for analysis. Yet, even once datasets are improved upon, and the information provided is cleaned and perfected, the achievement of “meaningful” transparency will require further steps.

That is, we will then have to explore how this useful information can be translated adequately to the consumer so as to ensure its use when choosing a provider. Only then---when consumers are able to be “smart” shoppers---can this information potentially lead to provider competition on price and quality, and ultimately propel overall health system improvement.

[1]Avastin can sometimes get billed as ‘unclassified biologics’ or ‘drugs unclassified injection.’ Based on conversations with ophthalmologists we found that it was unlikely for any other drugs in these categories to fall within Avastin’s price range. We included HCPCS codes billed by ophthalmologists between $40 and $62 (the maximum allowable in 2012 and three standard deviations below that number) at the risk of including drugs that were not Avastin.

Our goal here, like many before us, is to highlight striking disparities in this dataset (despite its limitations); attempt to understand why they occur; and provide opportunities to address them.

We examine three major issues: geographic variation; individual provider variation; and variation across care settings. Finally, we outline recommendations for future data releases to encourage more practical analyses.

Geographic Variation in Practice Patterns

A popular example highlighted by the CMS data was the rate of use of Lucentis--a drug prescribed for patients with age-related macular degeneration (AMD). Although a clinical study demonstrated similar outcomes for Lucentis ($2,000 per dose) versus Avastin ($50 per dose), the CMS data revealed total Lucentis spending of $1 billion. Reports also highlighted several ophthalmologists whose Lucentis billings were so high that they can only be described as “outliers.”

We analyzed the geographic pattern of Lucentis use by looking at the proportion of unique beneficiaries who received Lucentis by state (Exhibit 1).1 The states showing the highest proportion of Lucentis administration were Connecticut (82 percent), New York (67 percent), Iowa (66 percent), and Kansas (64 percent).

On the other hand, no beneficiaries received Lucentis in Alaska and Wyoming, and in South Carolina, Montana, and Idaho less than 10 percent of beneficiaries received Lucentis.

Exhibit 1: Percentage of Medicare Part B Beneficiaries that Were Prescribed Lucentis by Ophthalmologists by State, Year 2012

We also looked at the mix of Lucentis and Avastin usage by calculating the percentage of providers within a state administering only Lucentis (Exhibit 2). In 15 states, over 25 percent of ophthalmologists administered only Lucentis. This was highest in Connecticut, where over 24 of the 32 providers followed this pattern.

However, in the majority of states, most providers administered a mix of the two drugs, indicating that they potentially took patient circumstances and costs into account, even though Avastin is considered an off-label drug for AMD. When the Office of the Inspector General (OIG) conducted a study about the incentives of physicians to provide Avastin over Lucentis, 70 percent of physicians responded that cost was the primary factor, 45 percent reported that effectiveness was a reason, and 40 percent gave patient insurance coverage as a reason.

Articles have criticized high Lucentis users, but the number of providers administering Avastin instead of Lucentis (or a mix of both)---even though economic incentives encourage Lucentis, and Avastin is considered off-label for this particular condition---shows that many providers are willing to think not just of patient outcomes, but of costs as well.

Exhibit 2: Percentage of Ophthalmologists Prescribing Only Lucentis to Medicare Part B Beneficiaries by State, Year 2012

Variation Across Sites of Care

Medicare reimburses for procedures and services differently depending on where they are provided. The justification is to offset the higher overhead costs of certain facilities (e.g. hospitals and surgical centers compared to physician offices).

However, this reimbursement mechanism can incentivize providers to conduct services in higher-paying settings when unnecessary, as well as to fraudulently bill for such settings even when services are delivered in lower-paying sites. For example, an OIG study found that in a sample of 100 services, providers incorrectly attribute the site of service, resulting in overpayments.

We examined sites of service for non-complex office visits across gastroenterology, cardiology, and oncology -- three specialties that tend to deliver care across a range of sites. Medicare reimbursement is higher for hospital visits as compared to those in a physician office.

Overall, we found that most doctors bill regular, level 3 evaluation and management visits in non-hospital settings. Oncologists have the highest percentage billed in hospital-type facilities --15 percent of non-complex office visits. In this case, we were limited in our analysis because the dataset does not include the additional amount that is paid in hospital settings.

Over and Under-Utilization of Procedures and Services

Improper utilization of procedures can often be indicators of medical inefficiency or fraud. One analysis of possible overutilization pulled from this dataset has been conducted by the investigative reporting nonprofit ProPublica.

Since Medicare codes patient visits on a scale of complexity, one being the least complex and five being the most complex, ProPublica highlighted providers billing for mostly complex, expensive visits at seemingly unexplainably high rates.

Their analysis spurred conversations around Medicare billing practices for outpatient visits -- in general, it was considered unlikely that providers should only be billing at the highest complexity levels; patient-level data on outcomes or risk adjustment—not included in the data release—would unlikely justify such a pattern.

Recommendations for Future Data Releases

Integrate Data Sources to Identify Harmful Financial Incentives. As more health care data sources are released into the public domain, these can be integrated to conduct deeper analyses and achieve a fuller view of a provider’s practice. For example, in September 2014, Medicare released the Open Payments dataset, which contains information on the financial relationships between providers and pharmaceutical and medical device companies.

Though this dataset is currently quite limited in its usefulness to researchers, if later versions are improved, they could be linked to the Medicare Part B physician data to uncover whether providers delivering unusually high concentrations of specific services, such as outpatient prescription drugs or durable medical equipment, are receiving payments from pharmaceutical and medical device companies for their provision.

To gain a better understanding of a provider’s quality of care, quality reporting data should also be integrated in future datasets. For example, information could be included from the Physician Quality Reporting System (PQRS) – a program that provides physicians with payment incentives and adjustments to adequately report quality data.

Develop a Continual Data Verification System. Physician advocates have voiced concern that the data included in the Medicare physician payment data could be erroneous and thus misleading. For example, because clinicians working under a physician’s supervision can bill under their name (or National Provider Identifier), in the current dataset it may appear as though a single physician has provided more services than they actually have.

Specialty societies have therefore suggested that, in future data releases, physicians should have the ability to review and correct potential mistakes before the data are published. Physicians were in fact afforded the ability to review and dispute the Open Payments data before its release, through the use of a government website. However, physician advocates still criticized the review process as too rushed and cumbersome.

This process must therefore be better streamlined and physicians should be allowed to review and update their information (e.g. changes of address) on a continual basis, as needed.

Render Health Care Data More Accessible to All Researchers.Researcher access to Medicare health care datasets is often limited due to excessive costs for their use and substantial delays in gaining access. Currently, to gain access to a multitude of useful Medicare provider data, researchers must pay a fee that can exceed $100,000.

Moreover, the data files themselves are often unwieldy, requiring the use of expensive statistical programs for their analysis. Both the cost and complexity of these datasets means that their use by independent researchers and analysts is hampered. To propel greater analysis of this information, CMS should change its data sharing policies to render datasets less expensive and more accessible to a wider range of researchers.

Include Facility Cost Data.As outlined in sections above, inclusion of facility cost information could help better identify those providers who deliver services in higher-paying hospital settings, when they could be delivered in lower cost community or physician office settings. The inclusion of facility cost data could also allow deeper analyses on specific subspecialties and procedures, and create further evidence on the need for facility payment methodologies that are site neutral.

In fact, CMS and the Medicare Payment Advisory Commission (MedPAC) have both proposed plans to implement site-neutral payments, but further research by a wider range of organizations must be lead to help determine suitable subspecialties and procedure codes where payment differences are particularly egregious.

Include Patient-level Data. The current dataset lacks patient information such as age or diagnosis, information that is necessary to determine whether a service provided is indeed low-value to a specific type of patient. Taking the case of prostate cancer screenings---which are deemed unnecessary for men over the age 75---a service might only be low-value for patients of certain ages, as well as with certain health care conditions.

As many recommendations are based on a patient’s age, if releasing individual patient-level age data poses a problem, such as privacy, CMS should consider grouping patients into five-year cohorts (i.e. 60-65, 66-70, etc.). In general, the inclusion of patient information, even if it were aggregated to the individual provider level, would be useful to ensure that findings can be risk-adjusted and that providers serving higher-risk and more complex patient populations are not criticized for higher spending patterns that result.

Include Geographic Benchmarks.Research has shown that health care utilization varies based on geography. Therefore, geographic benchmarks, perhaps by hospital referral region, based on local demographics, must be included in future datasets to enhance geographic comparisons of utilizations rates for individual providers and health systems, as well as procedures, tests, and prescriptions.

Include Time-series Data.The 2014 dataset only includes information from 2012. In future releases, we not only recommend that the data be up-to-date, but we also suggest that more historical data be provided so as to allow deeper analyses of provider utilization and cost trends over time.

Though the release of the Medicare physician payment dataset signified a historically large step toward transparency, there is still a long way to go before these data can be considered useful for analysis. Yet, even once datasets are improved upon, and the information provided is cleaned and perfected, the achievement of “meaningful” transparency will require further steps.

That is, we will then have to explore how this useful information can be translated adequately to the consumer so as to ensure its use when choosing a provider. Only then---when consumers are able to be “smart” shoppers---can this information potentially lead to provider competition on price and quality, and ultimately propel overall health system improvement.

[1]Avastin can sometimes get billed as ‘unclassified biologics’ or ‘drugs unclassified injection.’ Based on conversations with ophthalmologists we found that it was unlikely for any other drugs in these categories to fall within Avastin’s price range. We included HCPCS codes billed by ophthalmologists between $40 and $62 (the maximum allowable in 2012 and three standard deviations below that number) at the risk of including drugs that were not Avastin.

Given the continued significant impact of obesity on both public health and health care spending, a more effective way to tackle the epidemic is needed, according to a paper published today in the Lancet co-authored by Brookings Center on Social Dynamics and Policy Director and Senior Fellow Ross Hammond.

A “systems approach” offers particular promise, by considering multiple ways in which food policies can affect the food, information, and social environments that underpin dietary intake and by developing a set of reinforcing policy actions to target these pathways, write Hammond and his co-authors.

In “Smarter food policies for obesity prevention,” the authors lay out several specific food policy proposals to move toward such a systems approach, focusing on the interaction of food preferences and the environment in which they are learned and expressed. They highlight four specific pathways through which policies can have high impact:

Policies can work to facilitate learning of healthy preferences and habits, in school and other early-life settings, through repeated exposure and social influence by parents, peers, and role models. This is particularly important because unhealthy preferences and habits can be difficult to unlearn. School settings can facilitate exposure to more fruits and vegetables while restricting exposure to less healthy options through food standards.

Policies can help to remove barriers to expressing healthy preferences. These barriers can include food prices or other issues that make good dietary choices inaccessible to some groups, and a lack of available nutrition information about choices.

Policies can encourage or “nudge” reassessment of unhealthy preferences by affecting the way in which food is presented and priced through subsidies, taxes, and altered retail or advertising environments.

Policies can stimulate actions across the broader food system, from farming to processing to distribution. The food system is complex and multi-layered, but forms the context for all dietary choices and is an important focus for policy. A recent National Academy of Sciences report to which Hammond also contributed provides a framework for understanding the impact of food system policy choices.

Rather than approaching any specific policy as a “magic bullet,” the authors of the Lancet paper advocate a combination of actions that are mutually reinforcing, that are designed to target several of these specific pathways at once, and that cross multiple policy domains and contexts. They lay out specific steps for the design of smarter policies, emphasizing the importance of transdisciplinary engagement between public health, behavioral science, and complex systems science as well as “systems oriented” assessment of how policies work. The paper also lays out the central role that computational modeling can play in assisting decision-makers, both in identifying key mechanisms at work and in designing policies to effectively target these mechanisms.

Hammond’s past research found that obesity accounts for fully 21 percent of all U.S. medical expenditures, translating to $215 billion annually in overall economic impacts, and continues to be a major health problem, with more than two-thirds of Americans now overweight and rapid recent increases among children. Although some progress has been made, the new Lancet paper argues that “smarter” food policies are needed, grounded in a systems approach, in order to make faster progress in addressing the global obesity epidemic.

Lancet Abstract: "Smarter food policies for obesity prevention"

Prevention of obesity requires policies that work. In this Series paper, we propose a new way to understand how food policies could be made to work more effectively for obesity prevention. Our approach draws on evidence from a range of disciplines (psychology, economics, and public health nutrition) to develop a theory of change to understand how food policies work. We focus on one of the key determinants of obesity: diet. The evidence we review suggests that the interaction between human food preferences and the environment in which those preferences are learned, expressed, and reassessed has a central role. We identify four mechanisms through which food policies can affect diet: providing an enabling environment for learning of healthy preferences, overcoming barriers to the expression of healthy preferences, encouraging people to reassess existing unhealthy preferences at the point-of-purchase, and stimulating a food-systems response. We explore how actions in three specific policy areas (school settings, economic instruments, and nutrition labeling) work through these mechanisms, and draw implications for more effective policy design. We find that effective food-policy actions are those that lead to positive changes to food, social, and information environments and the systems that underpin them. Effective food-policy actions are tailored to the preference, behavioral, socioeconomic, and demographic characteristics of the people they seek to support, are designed to work through the mechanisms through which they have greatest effect, and are implemented as part of a combination of mutually reinforcing actions. Moving forward, priorities should include comprehensive policy actions that create an enabling environment for infants and children to learn healthy food preferences and targeted actions that enable disadvantaged populations to overcome barriers to meeting healthy preferences. Policy assessments should be carefully designed on the basis of a theory of change, using indicators of progress along the various pathways towards the long-term goal of reducing obesity rates.

Given the continued significant impact of obesity on both public health and health care spending, a more effective way to tackle the epidemic is needed, according to a paper published today in the Lancet co-authored by Brookings Center on Social Dynamics and Policy Director and Senior Fellow Ross Hammond.

A “systems approach” offers particular promise, by considering multiple ways in which food policies can affect the food, information, and social environments that underpin dietary intake and by developing a set of reinforcing policy actions to target these pathways, write Hammond and his co-authors.

In “Smarter food policies for obesity prevention,” the authors lay out several specific food policy proposals to move toward such a systems approach, focusing on the interaction of food preferences and the environment in which they are learned and expressed. They highlight four specific pathways through which policies can have high impact:

Policies can work to facilitate learning of healthy preferences and habits, in school and other early-life settings, through repeated exposure and social influence by parents, peers, and role models. This is particularly important because unhealthy preferences and habits can be difficult to unlearn. School settings can facilitate exposure to more fruits and vegetables while restricting exposure to less healthy options through food standards.

Policies can help to remove barriers to expressing healthy preferences. These barriers can include food prices or other issues that make good dietary choices inaccessible to some groups, and a lack of available nutrition information about choices.

Policies can encourage or “nudge” reassessment of unhealthy preferences by affecting the way in which food is presented and priced through subsidies, taxes, and altered retail or advertising environments.

Policies can stimulate actions across the broader food system, from farming to processing to distribution. The food system is complex and multi-layered, but forms the context for all dietary choices and is an important focus for policy. A recent National Academy of Sciences report to which Hammond also contributed provides a framework for understanding the impact of food system policy choices.

Rather than approaching any specific policy as a “magic bullet,” the authors of the Lancet paper advocate a combination of actions that are mutually reinforcing, that are designed to target several of these specific pathways at once, and that cross multiple policy domains and contexts. They lay out specific steps for the design of smarter policies, emphasizing the importance of transdisciplinary engagement between public health, behavioral science, and complex systems science as well as “systems oriented” assessment of how policies work. The paper also lays out the central role that computational modeling can play in assisting decision-makers, both in identifying key mechanisms at work and in designing policies to effectively target these mechanisms.

Hammond’s past research found that obesity accounts for fully 21 percent of all U.S. medical expenditures, translating to $215 billion annually in overall economic impacts, and continues to be a major health problem, with more than two-thirds of Americans now overweight and rapid recent increases among children. Although some progress has been made, the new Lancet paper argues that “smarter” food policies are needed, grounded in a systems approach, in order to make faster progress in addressing the global obesity epidemic.

Lancet Abstract: "Smarter food policies for obesity prevention"

Prevention of obesity requires policies that work. In this Series paper, we propose a new way to understand how food policies could be made to work more effectively for obesity prevention. Our approach draws on evidence from a range of disciplines (psychology, economics, and public health nutrition) to develop a theory of change to understand how food policies work. We focus on one of the key determinants of obesity: diet. The evidence we review suggests that the interaction between human food preferences and the environment in which those preferences are learned, expressed, and reassessed has a central role. We identify four mechanisms through which food policies can affect diet: providing an enabling environment for learning of healthy preferences, overcoming barriers to the expression of healthy preferences, encouraging people to reassess existing unhealthy preferences at the point-of-purchase, and stimulating a food-systems response. We explore how actions in three specific policy areas (school settings, economic instruments, and nutrition labeling) work through these mechanisms, and draw implications for more effective policy design. We find that effective food-policy actions are those that lead to positive changes to food, social, and information environments and the systems that underpin them. Effective food-policy actions are tailored to the preference, behavioral, socioeconomic, and demographic characteristics of the people they seek to support, are designed to work through the mechanisms through which they have greatest effect, and are implemented as part of a combination of mutually reinforcing actions. Moving forward, priorities should include comprehensive policy actions that create an enabling environment for infants and children to learn healthy food preferences and targeted actions that enable disadvantaged populations to overcome barriers to meeting healthy preferences. Policy assessments should be carefully designed on the basis of a theory of change, using indicators of progress along the various pathways towards the long-term goal of reducing obesity rates.

Authors

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http://www.brookings.edu/blogs/techtank/posts/2015/02/12-anthem-hack-health-privacy?rssid=health{45A84DCE-150D-4120-B3CC-D4A601298344}http://webfeeds.brookings.edu/~/85160552/0/brookingsrss/topics/health~The-Anthem-hack-shows-there-is-no-such-thing-as-privacy-in-the-health-care-industryThe Anthem hack shows there is no such thing as privacy in the health care industry

Data breaches in the health care industry happen more often than you might think. The recent attack on Anthem exposed the personal information of about 80 million patients and is the largest data breach in the history of the industry. Financial institutions, retailers, and other organizations have all suffered major breaches, but the health care sector is an increasingly attractive target for hackers. The Office for Civil Rights at the Department of Health and Human Services provides detailed information on breaches in which the data of more than 500 patients was exposed. According to our analysis of this database, the number of such incidents has increased from 13 in 2008 to 256 in 2013. The total number of patients affected by such privacy breaches increased from about half a million people in 2008 to nearly nine million people in 2014. The following plot shows the data breaches in four types of health care entities. The size of the bubbles is proportionate to the total number of individuals affected by the data breaches.

Although, it is neither economic nor technically possible to completely eliminate the risk of data breaches, the current market structure and regulatory framework in the health care sector differentiate it from other industries and make it especially prone to future hacking attacks. This is why we should expect larger and more frequent data breaches in the health care sector in the future.

Digital security is not a business priority for health care organizations

Protecting the customers’ privacy is amongst the most important activities of businesses in every industry, except the health care industry. Health care companies have less competition than other industries where consumers can choose between many different options and do business with an organization that values privacy protection. For most companies, spending on digital security is considered a strategic investment. It is a necessity without which many of the current businesses will immediately vanish. Imagine what would happen if the databases of a major online retailer, such as Amazon, were hacked. Customers would immediately react by avoiding Amazon and shopping from other online retailers. It is not hard to guess that after the recent data breaches at Home Depot, many customers preferred to swipe their credit card at other retailers such as Lowe’s rather than risking it at Home Depot. If such breaches happen too often and receive enough publicity, there is an increased probability that the targeted businesses will lose their customers and eventually go bankrupt. This creates a strong incentive for businesses to avoid data breaches through strengthening their defenses. To attract customers, businesses should first earn their trust.

Now consider the patients’ reaction to the Anthem hacking incident. They are outraged, but lack useful responses. They can’t change their health insurer and often must keep their health care provider. Most patients receive health insurance through work or the government. If they are covered under Medicare, Medicaid, or Military Health Insurances they do not have any choice other than remaining with the same insurer. Employers typically have long-term contracts with insurers to provide coverage for their employees and it is very difficult to terminate such contracts. Even if it was possible, despite their ethical obligations, the employers do not have a direct and immediate interest to do so. After all, the breaches are affecting their employees, not them.

Patients are unlikely to change their doctor if they are impacted by a data breach. Most people choose their health care provider based on proximity to their residence. There is a limited supply of such providers in a limited geographical area. In many instances, there is only one specialist, testing center or hospital within miles of a patient’s home. The scarcity of specialized medical services means most patients have no choice. Patients who overcome this barrier must still endure the emotional and medical costs of switching their provider with no guarantee that the new provider will better protect their privacy. The market for health care IT systems is dominated by only a few vendors and the chance that two providers employ IT systems with security features that are virtually the same is very high. It is also conceivable that both providers belong to a larger health care organization and use a single IT system, which suffers from the same security problems.

In a market where such major security breaches have little to no effect on the revenue stream of the organizations, there is no economic incentive to invest in digital security and prevent a data breach.

Current health care laws fail to provide adequate protection

The Health Insurance Portability and Accountability Act, commonly referred to as HIPAA, contains the most important set of laws that are specifically designed to protect patient privacy. Although HIPAA suggests a set of cautionary policies designed to protect patient privacy and prevent data breaches, there aren’t significant penalties for violating these policies. According to the latest revision of HIPAA, health care organizations that “knew, or by exercising reasonable diligence would have known” of the privacy violations but did not prevent them could potentially be fined a maximum of $1.5 million. To put this in perspective, note that the net income of Anthem in 12 months ending in December 31st, 2014 was $2.5 billion. If Anthem were proven guilty of willful neglect, which is very unlikely, it could lose 0.00058 percent of its net income. Anthem makes that much money in one hour and 15 minutes.

In case of such major data breaches, class action lawsuits may be possible under state law. But these lawsuits happen after the damage from a breach is done. Due to the unique features of personal health information, it is very difficult to measure the financial losses of the victims and fairly compensate them.

HIPAA does not provide sufficient privacy protections for patients. Laws and regulations should drive the health care sector to implement proactive security measures and privacy policies to prevent such risks from happening in the first place rather than designing contingency plans to deal with financial consequences after the fact.

Anthem itself provides the best support for these arguments. According to Wall Street Journal, “it doesn’t expect the incident to affect its 2015 financial outlook, primarily as a result of normal contingency planning and preparation.”

Authors

Data breaches in the health care industry happen more often than you might think. The recent attack on Anthem exposed the personal information of about 80 million patients and is the largest data breach in the history of the industry. Financial institutions, retailers, and other organizations have all suffered major breaches, but the health care sector is an increasingly attractive target for hackers. The Office for Civil Rights at the Department of Health and Human Services provides detailed information on breaches in which the data of more than 500 patients was exposed. According to our analysis of this database, the number of such incidents has increased from 13 in 2008 to 256 in 2013. The total number of patients affected by such privacy breaches increased from about half a million people in 2008 to nearly nine million people in 2014. The following plot shows the data breaches in four types of health care entities. The size of the bubbles is proportionate to the total number of individuals affected by the data breaches.

Although, it is neither economic nor technically possible to completely eliminate the risk of data breaches, the current market structure and regulatory framework in the health care sector differentiate it from other industries and make it especially prone to future hacking attacks. This is why we should expect larger and more frequent data breaches in the health care sector in the future.

Digital security is not a business priority for health care organizations

Protecting the customers’ privacy is amongst the most important activities of businesses in every industry, except the health care industry. Health care companies have less competition than other industries where consumers can choose between many different options and do business with an organization that values privacy protection. For most companies, spending on digital security is considered a strategic investment. It is a necessity without which many of the current businesses will immediately vanish. Imagine what would happen if the databases of a major online retailer, such as Amazon, were hacked. Customers would immediately react by avoiding Amazon and shopping from other online retailers. It is not hard to guess that after the recent data breaches at Home Depot, many customers preferred to swipe their credit card at other retailers such as Lowe’s rather than risking it at Home Depot. If such breaches happen too often and receive enough publicity, there is an increased probability that the targeted businesses will lose their customers and eventually go bankrupt. This creates a strong incentive for businesses to avoid data breaches through strengthening their defenses. To attract customers, businesses should first earn their trust.

Now consider the patients’ reaction to the Anthem hacking incident. They are outraged, but lack useful responses. They can’t change their health insurer and often must keep their health care provider. Most patients receive health insurance through work or the government. If they are covered under Medicare, Medicaid, or Military Health Insurances they do not have any choice other than remaining with the same insurer. Employers typically have long-term contracts with insurers to provide coverage for their employees and it is very difficult to terminate such contracts. Even if it was possible, despite their ethical obligations, the employers do not have a direct and immediate interest to do so. After all, the breaches are affecting their employees, not them.

Patients are unlikely to change their doctor if they are impacted by a data breach. Most people choose their health care provider based on proximity to their residence. There is a limited supply of such providers in a limited geographical area. In many instances, there is only one specialist, testing center or hospital within miles of a patient’s home. The scarcity of specialized medical services means most patients have no choice. Patients who overcome this barrier must still endure the emotional and medical costs of switching their provider with no guarantee that the new provider will better protect their privacy. The market for health care IT systems is dominated by only a few vendors and the chance that two providers employ IT systems with security features that are virtually the same is very high. It is also conceivable that both providers belong to a larger health care organization and use a single IT system, which suffers from the same security problems.

In a market where such major security breaches have little to no effect on the revenue stream of the organizations, there is no economic incentive to invest in digital security and prevent a data breach.

Current health care laws fail to provide adequate protection

The Health Insurance Portability and Accountability Act, commonly referred to as HIPAA, contains the most important set of laws that are specifically designed to protect patient privacy. Although HIPAA suggests a set of cautionary policies designed to protect patient privacy and prevent data breaches, there aren’t significant penalties for violating these policies. According to the latest revision of HIPAA, health care organizations that “knew, or by exercising reasonable diligence would have known” of the privacy violations but did not prevent them could potentially be fined a maximum of $1.5 million. To put this in perspective, note that the net income of Anthem in 12 months ending in December 31st, 2014 was $2.5 billion. If Anthem were proven guilty of willful neglect, which is very unlikely, it could lose 0.00058 percent of its net income. Anthem makes that much money in one hour and 15 minutes.

In case of such major data breaches, class action lawsuits may be possible under state law. But these lawsuits happen after the damage from a breach is done. Due to the unique features of personal health information, it is very difficult to measure the financial losses of the victims and fairly compensate them.

HIPAA does not provide sufficient privacy protections for patients. Laws and regulations should drive the health care sector to implement proactive security measures and privacy policies to prevent such risks from happening in the first place rather than designing contingency plans to deal with financial consequences after the fact.

Anthem itself provides the best support for these arguments. According to Wall Street Journal, “it doesn’t expect the incident to affect its 2015 financial outlook, primarily as a result of normal contingency planning and preparation.”

Authors

]]>
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http://www.brookings.edu/blogs/brookings-now/posts/2015/02/alice-rivlin-king-v-burwell?rssid=health{655826C5-487F-43EC-AD87-B10B06E4368C}http://webfeeds.brookings.edu/~/85060729/0/brookingsrss/topics/health~Rivlin-on-King-v-Burwell-No-doubt-that-Congress-intended-to-extend-ACA-subsidies-to-all-Americans-who-qualifiedRivlin on King v. Burwell: No doubt that Congress intended to extend ACA subsidies to all Americans who qualified

In a recent Brookings Cafeteria podcast, Senior Fellow Alice Rivlin, director of the Engelberg Center for Health Care Reform, responded to a question about the King v. Burwell case now before the U.S. Supreme Court that could decide the future of the Affordable Care Act.

Listen to the entire podcast here.

She noted that the apparent ambiguity in the text of the law, the one specifying that subsidies are available "through an Exchange established by the State under [section] 1311 of the Patient Protection and Affordable Care Act," would "in normal times ... have been corrected right after the bill was passed." She added that "after you pass any major piece of legislation [there] is a piece of corrective legislation where you get the glitches out." Here is how Rivlin, the Leonard D. Schaeffer Chair in Health Policy Studies, put it:

It’s an unfortunate symptom of the polarization of our politics at the moment. I think there is no doubt, and most people think there is no doubt, that the Congress intended to extend the subsidies under the ACA to all Americans who qualified for them no matter where they lived. That’s a normal thing Congress would do. The Act was carelessly drafted, there were different versions, and somehow in the end somebody wrote a section that said the subsidies were only for the state exchanges and actually most of the states are now on the federal exchange. Now, I don’t think there’s any chance that Congress intended that a minority of the states would get these subsidies and people who happen to live in other states wouldn’t. However, that’s the way it reads, strictly interpreted.

So the court has got to decide, will we invalidate these subsidies in the states where the federal government runs the exchange or will we go with an interpretation of the intent of Congress?

In normal times, this would have been corrected right after the bill was passed. Normally, when we don’t have such bitter political polarization, what happens after you pass any major piece of legislation, is a piece of corrective legislation where you get the glitches out; there are always some glitches. But that didn’t happen this time and the Congress is so divided that it basically can’t happen.

So we’ll see what the Supreme Court does. They may go with intent of Congress [or] they may go with strict interpretation. If they go with the strict interpretation, then the Congress will have to decide what to do or individual states will have some options, too.

See also recent pieces from Henry Aaron and Stuart Butler on their assessments of alternatives to the Affordable Care Act.

Authors

In a recent Brookings Cafeteria podcast, Senior Fellow Alice Rivlin, director of the Engelberg Center for Health Care Reform, responded to a question about the King v. Burwell case now before the U.S. Supreme Court that could decide the future of the Affordable Care Act.

Listen to the entire podcast here.

She noted that the apparent ambiguity in the text of the law, the one specifying that subsidies are available "through an Exchange established by the State under [section] 1311 of the Patient Protection and Affordable Care Act," would "in normal times ... have been corrected right after the bill was passed." She added that "after you pass any major piece of legislation [there] is a piece of corrective legislation where you get the glitches out." Here is how Rivlin, the Leonard D. Schaeffer Chair in Health Policy Studies, put it:

It’s an unfortunate symptom of the polarization of our politics at the moment. I think there is no doubt, and most people think there is no doubt, that the Congress intended to extend the subsidies under the ACA to all Americans who qualified for them no matter where they lived. That’s a normal thing Congress would do. The Act was carelessly drafted, there were different versions, and somehow in the end somebody wrote a section that said the subsidies were only for the state exchanges and actually most of the states are now on the federal exchange. Now, I don’t think there’s any chance that Congress intended that a minority of the states would get these subsidies and people who happen to live in other states wouldn’t. However, that’s the way it reads, strictly interpreted.

So the court has got to decide, will we invalidate these subsidies in the states where the federal government runs the exchange or will we go with an interpretation of the intent of Congress?

In normal times, this would have been corrected right after the bill was passed. Normally, when we don’t have such bitter political polarization, what happens after you pass any major piece of legislation, is a piece of corrective legislation where you get the glitches out; there are always some glitches. But that didn’t happen this time and the Congress is so divided that it basically can’t happen.

So we’ll see what the Supreme Court does. They may go with intent of Congress [or] they may go with strict interpretation. If they go with the strict interpretation, then the Congress will have to decide what to do or individual states will have some options, too.

See also recent pieces from Henry Aaron and Stuart Butler on their assessments of alternatives to the Affordable Care Act.

As I argued recently, it’s high time for the GOP to move away from going-nowhere votes to repeal the Affordable Care Act (ACA or “Obamacare”). It is better to adopt the strategy of achieving a more conservative vision of health through structural-- and potentially bipartisan-- amendments to the ACA.

Earlier this week three key GOP lawmakers offered a plan that could do much to move such a strategy forward, even though its stated aim is to repeal and replace the ACA. The sponsors are Senator Richard Burr (R-NC), Senate Finance Committee Chairman Orrin Hatch (R-UT) and House Energy and Commerce Committee Chairman Fred Upton (R-MI).

Put aside for now the lawmakers’ statement that the first thing to do is to repeal the ACA. Whether or not that is politically feasible, the important thing is to focus on the core elements of the proposal as potential vehicles for broad-based reform. Below I discuss some of the most important elements that could help achieve such reform.

The Plan Embraces Income-Related Tax-Credits and Subsidies

The plan proposes age-adjusted, refundable and advanceable tax credits for buying health coverage or services for individuals with incomes of up to 300 percent of the federal poverty level ($35,010). Refundability means non-taxpayers would receive the equivalent of tax relief. The credits can rise to as much as $11,110 for older families and would be indexed (to the consumer price index (CPI) plus one percent). This is an important departure from other GOP plans that would provide a flat subsidy or a broader tax deduction, both of which would not provide enough help for some, while providing overly generous breaks to others. Health costs on average rise with age. So in embracing age-adjusted credits, the plan accepts the general approach of offering more help for households with higher health costs.

The specific credit design is imperfect but an important step to finding common ground with supporters of the ACA’s subsidy system. Better would be a refundable credit linked more directly to actual insurance and out-of-pocket costs and household income. I proposed such a concept more than ten years ago, with a maximum family credit then of $12,000. To be sure, income-based and cost-adjusted credits can be complicated to administer, as ACA supporters now know. But by taking this step, the GOP plan opens the way to a future agreement.

Reforming the Tax Treatment of Health Care

In an earlier version of this new GOP plan, Hatch and Burr tackled the regressive and overly generous individual tax relief for employer-sponsored health coverage by placing a tight cap on the “tax exclusion.” That cap was linked to the average cost of plans, and the cap would have been $11,250 for family coverage. They proposed using the resulting tax revenue to make health tax relief more equitable.

Regrettably, the new plan raises the cap above the thresholds even for the badly designed ACA “cadillac tax” on high-cost plans. A better approach would be to keep closer to the earlier caps and fold the tax exclusion changes into more general tax reform as well as health credits. In that way, the “pain” of a tax cap could be offset by the “gain” of, say, income tax rate reductions at the same time as funding a health tax credit. Remember that Hatch is Chairman of the Senate’s tax-writing committee and so has a big say in tax reform. In addition, linking a tax cap to regional differences in the average cost of health coverage would help account for geographic cost variations.

Encouraging State Flexibility and Medicaid Reform

The plan provides several opportunities for states to adapt and experiment, allowing federalism to work. For instance, states could auto-enroll individuals eligible for tax credits into insurance plans (a more acceptable approach than a mandate). And while the plan would move Medicaid towards a capped “allotment” for states, combined with greater flexibility – an anathema to many liberals – it would also encourage Medicaid-eligible individuals to use funds to enroll in private health insurance. So the plan does open the door to a serious and needed debate over the future of Medicaid. That debate should center on redesigning Medicaid to address the needs of different groups of beneficiaries in different ways.

Still, the GOP plan could have moved much more decisively towards state-led reform. In fact, within the ACA itself is a provision that allows states to propose radical changes in the basic provisions of the statute. Rather than seek to repeal that provision, known as Section 1332, the plan sponsors would have been much wiser to have proposed strengthening it.

To be sure, the proposal has attracted liberal criticism, with some critics raising design concerns that need to be addressed. But the Burr-Hatch-Upton plan is an important proposal from leading GOP lawmakers and includes approaches that contain the basis for agreement. If the White House and congressional Democrats are willing to look seriously at several of its central provisions, they will see opportunities for addressing the impasse over the ACA and achieving health coverage goals that are widely shared.

For the other side of the argument, you can read this commentary from my colleague Henry Aaron.

Authors

As I argued recently, it’s high time for the GOP to move away from going-nowhere votes to repeal the Affordable Care Act (ACA or “Obamacare”). It is better to adopt the strategy of achieving a more conservative vision of health through structural-- and potentially bipartisan-- amendments to the ACA.

Earlier this week three key GOP lawmakers offered a plan that could do much to move such a strategy forward, even though its stated aim is to repeal and replace the ACA. The sponsors are Senator Richard Burr (R-NC), Senate Finance Committee Chairman Orrin Hatch (R-UT) and House Energy and Commerce Committee Chairman Fred Upton (R-MI).

Put aside for now the lawmakers’ statement that the first thing to do is to repeal the ACA. Whether or not that is politically feasible, the important thing is to focus on the core elements of the proposal as potential vehicles for broad-based reform. Below I discuss some of the most important elements that could help achieve such reform.

The Plan Embraces Income-Related Tax-Credits and Subsidies

The plan proposes age-adjusted, refundable and advanceable tax credits for buying health coverage or services for individuals with incomes of up to 300 percent of the federal poverty level ($35,010). Refundability means non-taxpayers would receive the equivalent of tax relief. The credits can rise to as much as $11,110 for older families and would be indexed (to the consumer price index (CPI) plus one percent). This is an important departure from other GOP plans that would provide a flat subsidy or a broader tax deduction, both of which would not provide enough help for some, while providing overly generous breaks to others. Health costs on average rise with age. So in embracing age-adjusted credits, the plan accepts the general approach of offering more help for households with higher health costs.

The specific credit design is imperfect but an important step to finding common ground with supporters of the ACA’s subsidy system. Better would be a refundable credit linked more directly to actual insurance and out-of-pocket costs and household income. I proposed such a concept more than ten years ago, with a maximum family credit then of $12,000. To be sure, income-based and cost-adjusted credits can be complicated to administer, as ACA supporters now know. But by taking this step, the GOP plan opens the way to a future agreement.

Reforming the Tax Treatment of Health Care

In an earlier version of this new GOP plan, Hatch and Burr tackled the regressive and overly generous individual tax relief for employer-sponsored health coverage by placing a tight cap on the “tax exclusion.” That cap was linked to the average cost of plans, and the cap would have been $11,250 for family coverage. They proposed using the resulting tax revenue to make health tax relief more equitable.

Regrettably, the new plan raises the cap above the thresholds even for the badly designed ACA “cadillac tax” on high-cost plans. A better approach would be to keep closer to the earlier caps and fold the tax exclusion changes into more general tax reform as well as health credits. In that way, the “pain” of a tax cap could be offset by the “gain” of, say, income tax rate reductions at the same time as funding a health tax credit. Remember that Hatch is Chairman of the Senate’s tax-writing committee and so has a big say in tax reform. In addition, linking a tax cap to regional differences in the average cost of health coverage would help account for geographic cost variations.

Encouraging State Flexibility and Medicaid Reform

The plan provides several opportunities for states to adapt and experiment, allowing federalism to work. For instance, states could auto-enroll individuals eligible for tax credits into insurance plans (a more acceptable approach than a mandate). And while the plan would move Medicaid towards a capped “allotment” for states, combined with greater flexibility – an anathema to many liberals – it would also encourage Medicaid-eligible individuals to use funds to enroll in private health insurance. So the plan does open the door to a serious and needed debate over the future of Medicaid. That debate should center on redesigning Medicaid to address the needs of different groups of beneficiaries in different ways.

Still, the GOP plan could have moved much more decisively towards state-led reform. In fact, within the ACA itself is a provision that allows states to propose radical changes in the basic provisions of the statute. Rather than seek to repeal that provision, known as Section 1332, the plan sponsors would have been much wiser to have proposed strengthening it.

To be sure, the proposal has attracted liberal criticism, with some critics raising design concerns that need to be addressed. But the Burr-Hatch-Upton plan is an important proposal from leading GOP lawmakers and includes approaches that contain the basis for agreement. If the White House and congressional Democrats are willing to look seriously at several of its central provisions, they will see opportunities for addressing the impasse over the ACA and achieving health coverage goals that are widely shared.

For the other side of the argument, you can read this commentary from my colleague Henry Aaron.

For nearly five years Republicans have fruitlessly tried to repeal and obstruct implementation of the Affordable Care Act (ACA) or Obamacare. Apart from lacking the votes to do so, they have not been able to agree on an alternative. Now, Senator Richard Burr (R-NC), Senate Finance Committee Chairman Orrin Hatch (R-UT) and House Energy and Commerce Committee Chairman Fred Upton (R-MI) have put forward such a plan.

Is it viable? The plan is complex and only an outline has been released. Based on what is available, it is not adequate—not even close. Two aspects of the proposal tell the tale.

In place of the Obamacare requirement that people carry health insurance, the Burr-Hatch-Upton plan would impose penalties lasting indefinitely on families that, even briefly, go without insurance, even if insurance is unaffordable. And it is likely to be unaffordable, as the plan would give so little help to low-and moderate income families and individuals that out-of-pocket costs would be staggering.

One has to go beyond the rhetoric in which the proposal is cloaked and examine how it would work. Let’s focus on a couple ages 60 and 62 living in San Francisco. Under Obamacare, this couple qualifies for tax credits to help make insurance affordable if they are eligible to buy insurance from Covered California, the state’s health exchange. They would also be eligible for tax credits under the Burr-Hatch-Upton plan-- but much smaller ones. In fact, the credits would be so low that health insurance would probably be unaffordable, confronting the couple with cruel choices. To understand just how tough this plan is, one has to do the math.

Covered California set a premium of $20,652 for a couple of this age based on moderate coverage under the ‘silver plan,’ which serves as the base for determining tax credit assistance. Obamacare requires that couples with incomes of $31,460 (twice the federal poverty threshold), pay 6.34 percent of their income for health insurance and offers a tax credit to cover the rest of the premium. At that income level, the couple would have to pay $1,982 out of pocket and would receive a tax credit of $18,660 to cover the rest of the premium.

Under the Burr-Hatch-Upton plan, this couple would be eligible for a tax credit of only $11,110—and that amount would be the same, even if the couple still had dependent children living with them.

But that isn’t all. The Burr-Hatch-Upton plan would allow wider variations in premiums based on age than does the ACA. So, insurance companies would be authorized to charge this couple more under the Burr-Hatch-Upton plan than they would under the ACA. Taking into account this higher premium, this couple would have to spend 38 percent of their income—$11,837 to buy the same insurance plan.

If the couple’s income is a bit higher, just over three times the federal poverty threshold, or $47,190, Obamacare requires them to spend more of their own income, 9.5 percent, for the same plan, but it still provides a tax credit of more than $16,000. The Burr-Hatch-Upton plan provides nothing—it denies any financial help at all to individuals or families with income more than three times the federal poverty threshold. Under such a plan, the couple would have to spend more than 48 percent of its income to buy this basic insurance plan.

What would the couple do? If both are healthy, they might go without insurance. If they did, then later when the couple decided to buy insurance, they would discover that the Burr-Hatch-Upton plan had removed all limits on how high insurance companies could set their premiums or that it had limited their potential benefits until and unless the couple secured insurance for eighteen months in a row. If they were sick, they might scrimp on everything else and buy coverage. Note that because the sick would be more likely to buy coverage than the well, the insurance pool would get sicker, overall premiums would rise still more, and still more people would find insurance unaffordable. As a third option, the couple might buy insurance that covers fewer medical services or imposes higher deductibles and cost sharing. But then, of course, out-of-pocket payments would eat into their incomes. Obamacare helps cover deductibles and co-payments for people with incomes below two and one-half times the federal poverty threshold. The Burr-Hatch-Upton plan would provide no such help.

Against this background, it is ironic that the preface to the Burr-Hatch-Upton plan indicts Obamacare for sending ‘out-of-pocket costs skyrocketing.’ In fact, out-of-pocket spending has fallen since enactment of Obamacare—from 12.1 percent of total spending in 2009, the year before Obamacare was enacted to 11.6 percent 2013, the last year for which data are available. The Burr-Hatch-Upton plan would create the very problem for which it falsely blames Obamacare. In fact, the Burr-Hatch-Upton plan would also eliminate the very important annual limit on annual out-of-pocket expenses that Obamacare provides.

And there is a deeper lesson. One should not be fooled by slogans and generalities. One has to examine details in order to know whether a plan is or is not a basis for negotiation. Make no mistake—details of Obamacare do need fixing-- but those repairs involve filling holes in coverage, not making more holes. It requires making benefits more generous, not less. The Burr-Hatch-Upton plan proposes to move in the wrong direction. Such a plan cannot serve as a basis for negotiation.

For the other side of the argument, you can read this commentary from my colleague Stuart Butler.

Authors

For nearly five years Republicans have fruitlessly tried to repeal and obstruct implementation of the Affordable Care Act (ACA) or Obamacare. Apart from lacking the votes to do so, they have not been able to agree on an alternative. Now, Senator Richard Burr (R-NC), Senate Finance Committee Chairman Orrin Hatch (R-UT) and House Energy and Commerce Committee Chairman Fred Upton (R-MI) have put forward such a plan.

Is it viable? The plan is complex and only an outline has been released. Based on what is available, it is not adequate—not even close. Two aspects of the proposal tell the tale.

In place of the Obamacare requirement that people carry health insurance, the Burr-Hatch-Upton plan would impose penalties lasting indefinitely on families that, even briefly, go without insurance, even if insurance is unaffordable. And it is likely to be unaffordable, as the plan would give so little help to low-and moderate income families and individuals that out-of-pocket costs would be staggering.

One has to go beyond the rhetoric in which the proposal is cloaked and examine how it would work. Let’s focus on a couple ages 60 and 62 living in San Francisco. Under Obamacare, this couple qualifies for tax credits to help make insurance affordable if they are eligible to buy insurance from Covered California, the state’s health exchange. They would also be eligible for tax credits under the Burr-Hatch-Upton plan-- but much smaller ones. In fact, the credits would be so low that health insurance would probably be unaffordable, confronting the couple with cruel choices. To understand just how tough this plan is, one has to do the math.

Covered California set a premium of $20,652 for a couple of this age based on moderate coverage under the ‘silver plan,’ which serves as the base for determining tax credit assistance. Obamacare requires that couples with incomes of $31,460 (twice the federal poverty threshold), pay 6.34 percent of their income for health insurance and offers a tax credit to cover the rest of the premium. At that income level, the couple would have to pay $1,982 out of pocket and would receive a tax credit of $18,660 to cover the rest of the premium.

Under the Burr-Hatch-Upton plan, this couple would be eligible for a tax credit of only $11,110—and that amount would be the same, even if the couple still had dependent children living with them.

But that isn’t all. The Burr-Hatch-Upton plan would allow wider variations in premiums based on age than does the ACA. So, insurance companies would be authorized to charge this couple more under the Burr-Hatch-Upton plan than they would under the ACA. Taking into account this higher premium, this couple would have to spend 38 percent of their income—$11,837 to buy the same insurance plan.

If the couple’s income is a bit higher, just over three times the federal poverty threshold, or $47,190, Obamacare requires them to spend more of their own income, 9.5 percent, for the same plan, but it still provides a tax credit of more than $16,000. The Burr-Hatch-Upton plan provides nothing—it denies any financial help at all to individuals or families with income more than three times the federal poverty threshold. Under such a plan, the couple would have to spend more than 48 percent of its income to buy this basic insurance plan.

What would the couple do? If both are healthy, they might go without insurance. If they did, then later when the couple decided to buy insurance, they would discover that the Burr-Hatch-Upton plan had removed all limits on how high insurance companies could set their premiums or that it had limited their potential benefits until and unless the couple secured insurance for eighteen months in a row. If they were sick, they might scrimp on everything else and buy coverage. Note that because the sick would be more likely to buy coverage than the well, the insurance pool would get sicker, overall premiums would rise still more, and still more people would find insurance unaffordable. As a third option, the couple might buy insurance that covers fewer medical services or imposes higher deductibles and cost sharing. But then, of course, out-of-pocket payments would eat into their incomes. Obamacare helps cover deductibles and co-payments for people with incomes below two and one-half times the federal poverty threshold. The Burr-Hatch-Upton plan would provide no such help.

Against this background, it is ironic that the preface to the Burr-Hatch-Upton plan indicts Obamacare for sending ‘out-of-pocket costs skyrocketing.’ In fact, out-of-pocket spending has fallen since enactment of Obamacare—from 12.1 percent of total spending in 2009, the year before Obamacare was enacted to 11.6 percent 2013, the last year for which data are available. The Burr-Hatch-Upton plan would create the very problem for which it falsely blames Obamacare. In fact, the Burr-Hatch-Upton plan would also eliminate the very important annual limit on annual out-of-pocket expenses that Obamacare provides.

And there is a deeper lesson. One should not be fooled by slogans and generalities. One has to examine details in order to know whether a plan is or is not a basis for negotiation. Make no mistake—details of Obamacare do need fixing-- but those repairs involve filling holes in coverage, not making more holes. It requires making benefits more generous, not less. The Burr-Hatch-Upton plan proposes to move in the wrong direction. Such a plan cannot serve as a basis for negotiation.

For the other side of the argument, you can read this commentary from my colleague Stuart Butler.

"I think the Affordable Care Act is actually doing quite well," says Senior Fellow Alice Rivlin in this podcast. Rivlin, the Leonard D. Schaeffer Chair in Health Policy Studies and director of the Engelberg Center for Health Care Reform at Brookings, cited the expansion of medical insurance coverage, declining cost growth, and other positive factors for the ACA. She also reflects on continued political opposition to the law, the impending King v. Burwell Supreme Court case, and what it was like to stand up a new federal agency, the Congressional Budget Office, in 1975.

Also in the podcast, Senior Fellow David Wessel, director of the Hutchins Center on Fiscal and Monetary Policy, offers his regular "Wessel's Economic Update."

Authors

"I think the Affordable Care Act is actually doing quite well," says Senior Fellow Alice Rivlin in this podcast. Rivlin, the Leonard D. Schaeffer Chair in Health Policy Studies and director of the Engelberg Center for Health Care Reform at Brookings, cited the expansion of medical insurance coverage, declining cost growth, and other positive factors for the ACA. She also reflects on continued political opposition to the law, the impending King v. Burwell Supreme Court case, and what it was like to stand up a new federal agency, the Congressional Budget Office, in 1975.

Also in the podcast, Senior Fellow David Wessel, director of the Hutchins Center on Fiscal and Monetary Policy, offers his regular "Wessel's Economic Update."